Newdea

"Find, Fund, and Follow" your gifts and grants through Newdea. Had a web tour of their online beta software. For charities, particularly small grassroots orgs, it provides a way to track projects and their progress. More than that, it makes the charity transparent to donors. For donors it provides a way to research potential grantees and to track the effectiveness of grants made. For advisors the system provides a "value added" service for clients. For financial services companies, Newdea will private label the system.

What I liked best about this particular instantiation of the "Giving Market" concept is its business plan. At the heart of it are two profit points:

1) the charity pays for IT services to track the projects it conducts;

2) donors give to a donor advised fund inside a community foundation associated with Newdea; then Newdea nicks the assets going into and out of the fund.

The Newdea business model combines an IT sales strategy with the assets under management approach of a community foundation, and the "exit fees for grants," pioneered among others by Tides. With assets under management, and fees for grants, the possibility also exists for the financial services firms and their reps to participate in the income. Newdea also has a kind of built in viral marketing strategy. The reps of the associated firms, and the donors, will want to have their favorite causes on the system. They will drive the charities to sign up. As they do, and the money flows, those success stories will drive further charities to sign up.

I found myself wondering whether Newdea could serve as a "holding tank" and "admin package" for grassroots nonprofits who want to create planned gifts. Could the donor make the Newdea donor advised fund the beneficiary of, for example, her will? Or her IRA? The money would flow into that holding tank to be administered by a trusted person, designated by the donor. It could be a family member, say, or a cause-driven maven like Tracy Gary or Lenore Ealy.

In effect, I see Newdea, potentially, as disintermediating such groups as American Red Cross, United Way, and Community Foundations who today stand between the donor and the cause-driven projects at the grassroots.

Those heavily invested in the philanthropic status quo might want to start polishing their resumes. What do community foundations, or United Way, do that Newdea could not? And without all the dead weight? And the bigshots on the Board? And the Crystal Balls and High Society Flummery? For those who want control (and donors do); who want transparency and accountabillity (and donors do); and who despise high cost low value intermediaries (and many donors do); and who detest old money lethargy and social pretense (and many new donors do); Newdea is a refeshing alternative.

If Newdea can scale up to several thousand charities, community foundations will be hard pressed to compete with them for advisor driven dollars. What Fidelity started, Newdea, and other such intermediaries may finish. Fidelity with its gift fund garners billions without providing much "value added advice." Now, via Newdea, enter the advisors equipped with a a built in donor advised fund and a tech system that supports valued added grant making advice. Thus, the community foundation and United Way model gets hit from at least three sides: lower cost, greater benefit, more control, and more grantee transparency for donors; easy ways to get paid for advisors; and a solution for financial firms who want to hold on to donor dollars as long as possible by keeping them under management in captive, privately labelled philanthropic funds. The real winners may be the feisty grassroots orgs who are too politically engaged or too scruffy for the United Way or Community Foundation to endorse. Through Newdea, these orgs can reach out to donors directly, by making their pitch within the Newdea system, handling the money they receive responsibily, and getting the results today's donors seek.

By way of potential improvement, Newdea might consider adding some kind of "reputation system," like Amazon's, Ebay's, or Omidyar.net's to rate and rank causes and projects as "best of breed" within a standard taxonomy of nonprofits. They might also add spaces for the donors, charities, volunteers, and those served by the charity, to chat, blog, IM, post photos, or audio clips and create a living human bond. (Omidyar.net, again, might be a model.)

Newdea is still in beta, but well worth watching.

Comments

[Jon Husband]

Sounds quite interesting. I used to work for the United way (2 years ... 1982-84) and I've often wondered what kind of online capabilities might develop that would mimic it. I guess what i perceive is that the Net/web permits a very clear means for donor designation of gifts ... another strong example of disintermediation.

In terms of Newdea, I wasn't completely clear from your description as to what the value proposition (to "coin" a phrase) was, except for providing another place and links for giving and distriibuting

[Phil]

Value proposition(s):

For donors: find, fund, and follow the results of your gifts.

For charities: be visible to donors seeking to make grants, and thereby garner new gifts.

For advisors: get paid on money held in a donor advised fund pending distribution.

For financial corps: private label and bill as a value added for clients, and nick the cash flows.

[Donna]

For a fully functional version of the concepts behind check out our website - www.globalgiving.com. Search of 200 projects in 50+ countries, see progress reports, track your giving, give gift cards, etc. We feel like our wheel, while evolving, needn't be recreated....
I tried to figure out who is behind Newdea but their beta site is very vague about the organization...I'd love to connect with them to see about collaboration if anyone can help with that.

[phil cubeta]

Rick Harig at http://www.legacy-resources.com might be able to provide more info on Newdea.