GlobalGiving.com (formerly DevelopmentSpace) has been described as the ‘eBay of international development’. While the comparison is not exact, it does reflect our mission: To become the world’s richest marketplace for international aid and philanthropy. And when we say ‘richest’ we don’t mean only money; we mean ideas, expertise, capacity, and ultimately impact.

Our vision is a marketplace where social entrepreneurs the world over can get access to the capital and other help they need to deliver their social and economic development initiatives. In a nutshell, we want to globalize opportunity.

Our vision is clear: to create an open access marketplace that efficiently allocates resources to the people and projects that can make the greatest impact. We cannot realize this vision alone – many different players will be needed to create such a marketplace. This includes top-notch, visionary players like Ashoka and the Schwab Foundation to help select and groom a set of world-class social entrepreneurs; the venture-capital-style Acumen Fund to focus substantial resources on large innovative projects; the Global Funds for Women and Children and others like Trickle Up to find and resource exceptional grassroots projects; and promising new initiatives like ACCESS to devise ways for social entrepreneurs worldwide to demonstrate the quality of their work and management practices.

A common issue for many groups is that they have to do everything – from raising money to developing and implementing projects with local partners on the ground. Usually each is strong in one or two areas but weaker in others, and this leads to duplication and inefficiency.[1] GlobalGiving.com’s long-term goal is to provide a platform that allows each player to focus on their comparative advantage, and to interact efficiently with other players with complementary strengths. It will also enable new players with very specific strengths (eg marketing or business planning) to emerge and find clients.

Origins of GlobalGiving.com

GlobalGiving.com emerged from a series of physical marketplaces that my co-founder Mari Kuraishi and I created while we were at the World Bank. In 1998, we invited any team in the Bank to submit an idea for how the Bank could deliver its own poverty reduction mission more effectively. The teams then set up booths in the atrium of the Bank and ‘pitched’ their ideas to a jury panel of senior World Bank managers, NGO leaders and private sector executives. The event unleashed a torrent of new ideas, and we ended up funding 11 out of the 110 or so presented.[2]

What struck us afterwards was the number of people who thanked us, even if they didn’t win funding. One senior person told me that he had had his idea for 15 years but hadn’t told anyone about it before. He had now found a number of others with similar ideas to team up with. So Mari and I thought to ourselves, ‘If privileged World Bank experts have such problems having their ideas heard, what must it be like for everyone else in the world?’

So we decided on a second event. In late 1999, we invited ideas from social entrepreneurs around the world. Out of over 1,100 applications, we invited 300 finalists to Washington. These included two older Ugandan women who had never been outside their home province before who had developed a world-class microcredit scheme to provide income-earning opportunities for the young mothers who came to their postnatal clinics; two teams of supreme court justices from Latin America, one with a project to help educate local judges on how to adjudicate indigenous land rights cases; and someone from the National Air and Space Administration (NASA), who had an idea for using advanced satellite technology to help improve crop rotation and soil management in Africa and Asia.

After two days of ‘pitching’, 44 social entrepreneur teams were chosen for $5 million of funding. The Ugandan women won, and one set of supreme court justices. The NASA expert didn’t win, but was thrilled with the feedback on his idea he had had.

After the awards were announced, a South African woman who hadn’t got funding came up to me and asked when the secondary market was going to start. ‘Just because the World Bank didn’t fund our idea doesn’t mean that others funders in the world might not.’

That remark was the genesis of GlobalGiving.com. Within six months Mari and I left the World Bank to begin designing a marketplace that would allow social entrepreneurs across the world to submit project proposals and solicit funding and expertise. The model was eBay, the difference being that instead of selling dishes and movie posters, social entrepreneurs would be ‘selling’ social and economic development projects. In February 2002 we launched the ‘beta’ version of our website. Within two weeks, the first project – a toilet block at a school in India – was funded, prompting the Washington Post to call us ‘foreign aid at the speed of light’.

Going to scale

Although several other projects were funded as we completed our testing over the next few months, it became clear that we would need to focus on specific donor channels (eg employee giving) rather than waiting for the general public to discover the site and make donations. GlobalGiving.com was not going to emerge organically in the same way as eBay – at least not to start with.

In November 2002, at the invitation of Hewlett Packard, we entered the $4 billion a year US employee giving market by offering HP’s 70,000 employees the option to give directly to projects in developing countries. This resulted in funding for more than 50 projects. Although the dollar amounts were modest, we learned a lot along the way, and the basic concept was proven. We are hoping to develop similar partnerships with several more US corporations during 2003.

Other donor channels are opening as well. In early 2003 Calvert Foundation announced that, through collaboration with GlobalGiving.com, clients of their donor-advised fund facility can now give directly overseas. We have also processed several international donations for the philanthropy services division of Wachovia/First Union, one of the leading banks in the US.

Empowerment vs quality assurance

While designing GlobalGiving.com, we have had to address several of the challenges that Andrew Kingman raises in his overview article. We have by no means solved them all, but we are making progress.

The biggest initial tension is between empowerment and quality assurance. One of our core objectives is to give good social entrepreneurs anywhere in the world access to donors and experts. One key question is how the donors will know whether they can trust social entrepreneurs they would like to support.

On eBay, potential buyers can assess sellers through their ratings,[3] and knowing that their ratings are made public has a tremendous effect on the behaviour of most sellers. As a result it is the good-quality merchandise that tends to get sold, not the garbage. Our long-term goal is to achieve this same dynamic in our field, by helping social entrepreneurs, large and small, create a global reputation, based on their track record. This will ensure donors have the information they need to make informed decisions. This will take time, but initiatives like ACCESS (see p39) could accelerate the process dramatically.

In the meantime, our existing donors expect a certain level of quality and credibility now. The short-term solution is for social entrepreneurs to be validated by a group of trusted GlobalGiving.com partners – well-known international and locally based NGOs. Luckily, they realize that it is not a question of their no longer being needed. Rather, it is about realizing their own mission and values by facilitating access to ‘the funding market’ for grassroots groups. Many of the best NGOs are already focusing on capacity-building rather than simply funding, and it is this increased capacity that will help local groups eventually succeed in the marketplace by creating a track record of successful projects.

One challenge is to ensure that the existing so-called ‘international elite’ do not become gatekeepers by monopolizing the role of validating local groups. To this end, we are working with the Aga Khan Foundation and others to identify local intermediaries who can play this role. In fact, many NGOs we talk to are starting to shift their focus to building capacity for local intermediaries, seeing this as the best way to leverage their own scarce resources.

A scattergun effect?

As veterans of the World Bank who previously funded small numbers of large projects, we have thought a lot about the potential ‘scattergun’ issue that Kingman raises. If the volume of projects is low, this will be an issue. However, if we can stimulate the funding of a large number of projects, then GlobalGiving.com will lead to real market dynamics, where value gets created (and customer demand gets met) through a large number of relatively small interactions between buyers and sellers. In addition, of course, many resources will continue to flow through other channels and mechanisms. Just as investors invest in mutual funds as well as individual stocks and bonds, donors will continue to make contributions to large NGOs and allow those NGOs to make the strategic decisions about how to allocate their resources.

We need to keep in mind that markets are not a panacea – there are nearly always market failures. But if there is one thing that the Soviet experience of central planning taught us, it is that having a relatively small number of people make decisions about resource allocation does not lead to very good results.

1 One of the leading Africa education specialists for a large international NGO told us that he spends eighty percent of his time in the US raising money, when he should be in Africa working with school heads there.

2 This included several, such as an AIDS initiative, that became major strategic priorities for the Bank over the following year.

3 When you buy on eBay, you get an email from eBay asking about the quality of the goods (whether they matched the description given), overall service, shipping, etc, and asking you to rate the seller on a scale of 1-5. Potential buyers on eBay see all these ratings.

Dennis Whittle is co-founder and CEO of GlobalGiving.com. He can be contacted at dwhittle@GlobalGiving.com

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See http://www.GlobalGiving.com