If you are active in philanthropy, whether as a giver, an advisor, a nonprofit seeking funds, or as a financial institution providing "value-added" services to clients, I suggest you take the time to study Newdea: Study its website, consider its legal status, its ownership and management, and its business model. Take the time to form your own informed and considered opinion. They are visionary. And they are very ambitious. They also have the venture funding to make their vision a reality. And they are getting traction. In my opinion, they have a decent chance of revolutionizing our fractured field of practice - for better or for worse.
Essentially, Newdea provides a proprietary on-line meeting ground, or hub, enabling a donor to see how the donor's dollars go to work in the recipient organization and the impact those dollars have. That service is provided outright to donors by Newdea, or through advisors and firms to key clients. The nonprofit pays to play, and thereby get the tools to efficiently report financial inputs and programmatic "outcomes" to their donors . Since donors like "accountability" and "measurable results," and may be moved and engaged by the flow of stories and pictures back from the charity's grassroots program providers, the donor may give more, and tell others about it. You might say that Newdea will give an almost "unfair advantage" to the nonprofits who sign up and sign over a percentage of their revenues. The advantage is that these nonprofits who join have access to the donors on the system, including the tens of thousands, or ultimately hundreds of thousands of donors brought into the system by the large financial institutions that may well buy into the program. Those charities who do not sign up will not have the same tools to elicit donotions via the system. (The donor can give to nonprofits who have not signed up, but the donor will not see the nice reports about results except from those nonprofits who have signed up.) Hence nonprofits, once this thing gets momentum, will feel some pressure to join, lest they miss the moving train. Likewise financial companies who do not have the system may feel that their reps are at a competitive disadvantage. And so, as with many "network effects," the system begins to grow on itself, becoming more attractive the more organizations and donors it attracts, until it exerts an almost irrestibible pull, as does, say Microsoft in operating systems.
Newdea, then, for better or for worse, may become to high end giving what Microsoft (not Linux) is to our daily lives on the computer. Newdea may, if it gets critical mass, become a privately owned, then presumably publicly traded, corporation through which giving passes this way and that. What e-Bay was to flea markets, so Newdea may be to our patchy networks of philanthropy. Think Wal-Mart? Will Newdea crowd out the informal orgs and networks that make the third sector so amateurish, but also so much a citizen-sector? (Newdea may argue that the days of Mom and Pop nonprofits, community foundations, and networks of unbusinesslike amateurs are soon to be over as new government regulations similar to Sarbanes-Oxley force the sector to manage itself in a businesslike, transparent, and accountable way. Mr. William Blake, may I introduce your new boss, Mr. Jeremy Bentham? Welcome to the Panopitcon.)
How do I feel about all Newdea? Fascinated with Newdea's vision, optimistic about their success as a firm, impressed by the ability and charactr of their management, interested as a potential user of the system - and deeply concerned about what may happen someday when we are all dependent on Newdea and they decide to go to Wall Street and pull an IPO, leaving Newdea's founders as billionaires, as the new management steps in to profit maximize an entire sector. Essentially, what we have with Newdea is a business muscling as a consolidator into the disaggregated nonprofit world in a very savvy way. When they own the "operating system," those who control the company will have enormous power unchecked, as far as I can see, by any overarching controls, beyond those of the capital markets. That concerns me. I would be happier if the founder's stock was somehow owned inside a "wrapper" that vested ultimate control forever and always in a board or foundation whose charter was the public good, and who were accountable for that to the public. (Set it up as a "Program Related Investment" owned by a number of diverse foundations?)
So, please, if you are from the Newdea team - and I consider you kindred spirits committed to the public sector - how can you assure us that after we have all locked ourselves into your proprietary system, and talked it up to our friends, and made ourselves as dependent on you as we are on Microsoft that you will not only sell your firm to the highest bidder but sell us out as well? What safeguards have you built into this deal to make sure it tracks the public interest as well as those of investors and owners and managers? (Sounds like Linux, when you talk to Newdea, but in terms of legal structure, ownership and management it is more like Microsoft at the venture capital stage.)
I am forcing the hard questions, not as a skeptic, nor even a Cynic, like Diogenes in his barrel, but simply in the hopes that the ideals I see in the founders of Newdea have been, or will be given, ironclad form in the ownership and governance of this quasi-public good in the making.
Tell me about stewardship, Newdea, and how you will protect and govern the commons you are creating. Will it be democratically governed or another Wall Street driven corporate hierarchy devoted to the Almighty dollar? As with any double bottom line company we need to know who is going to balance those two bottom lines (social and private good), and how the interest of stakeholders - all of us as citizens - are protected as you eventually own, fence, plumb, optimize, manage, and sell the underlying infrastructure of the third sector to Wall Street.
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