Today's post highlights three organizations that give us a peek into the future of philanthropy. These companies have embraced two secrets that the internet has helped to unlock.

One of the main reasons for my post is my desire to express how much I love their ideas! I get excited every time I think about what these companies have achieved. I want more nonprofits around the world to think just like these companies, so they will not get left behind in a constantly changing world.

These companies have embraced two methodologies that the new online era gives you access to like never before, they are:

•    Economies of Scale
•    The Power of the Crowd

1. Economies of Scale: The traditional definition of this term according to Wikipedia is "factors that cause a producer's average cost per unit to fall as the scale of the output is increased." Most traditional businesses look to this as a way to increase both margins and efficiency. However, if you look at this term from a different perspective, the new CrowdGiving model allows socially-minded organizations to rally huge amounts of people and funnel them into an efficient manner. This assists with the various causes they want to support. Rather than having to sell your cause to only friends, family, and businesses you will have physical access to put your stories online. Then you can have other people do the work for you!

2. The Power of the Crowd - There is a lot to be said for giving people the opportunity to change a life at the click of a button. The old model that nonprofits subscribed to was paying a consultant to hunt down large donations or having board members "lean on" their rich buddies to give a little extra. These new CrowdGiving sites allow people all over the world to give in small amounts and collectively have a huge impact. So, let's take a look at the online charities of the future. Disclaimer: once you start using them you will become addicted. Don't say we didn't warn you!
What Kiva has done for the philanthropic world is something I don't think we will ever be able to thank them for. I feel like they are one of the first nonprofits that truly were able to crack the code - because they have. So, how does it work? Kiva is a site that allows you to give as little as $25 towards a microloan somewhere in the world.

After you log onto their site and create your profile, you then click on the VERY long list of people that need a microloan to start or expand their business. You research each person's business idea and then you decided whether you want to give money towards their microloan. It can be anything from a guy in Cambodia that needs $500 to buy a cow so he can sell the milk at the market, to a woman in the US that needs the capital to start a computer repair shop. You can give $25 and I will give $25. The great thing is that so will 100 other people, once they see how far a small donation can go. 

That is the beauty of Kiva, it allows people from all over the world to come together and give a little bit to gain a huge impact. The other beautiful thing is that you are giving loans, so over time you are going to get your money back so you can lend again (unless you choose to donate your loan repayments to Kiva as a donation) Kiva's homepage stats tell me that they have lent $2.2million this week and have funded 5,504 loans and they currently have a 98.98% repayment rate. Need I say anymore?
The fact that DonorsChoose has an endorsement from Oprah and Colbert already gives them credibility, an unfair advantage, and a web team that probably wasn't ready for the web traffic they received. Everyone knows that the state of our education system is in complete and utter disarray in the country. We will not get into the reasons why on this blog, because there are other blogs for that! But one of the recurring stories related to this issue that we hear quite often is of extraordinary teachers dedicated to the cause of improving eduction. We hear about them putting in the long hours and often times paying for supplies out of their own pockets due to budget cuts. DonorsChoose gives these awesome teachers a place where they can get help.

Here's how it works...let’s say you are a teacher in the inner city and you REALLY want to do the “old volcano with baking soda project” to show your kids how it all works, but you are strapped for cash. You as a teacher can log onto DonorsChoose and create a project that you would like to solicit to the world to help accomplish. Similar to Kiva, I give $25, you and everyone else gives $25 and together we give these teachers back the empowerment they need.

The first time I supported a project on this site I got a personal email from the teacher via the website. They thanked me for my support and gave updates on the project which was a bonus that I loved! As of right now the DonorsChoose homepage tells me that this week 2,636 donors helped 65,158 students.


I first heard about Vittana through Tim Ferriss's blog which I follow religiously. About two weeks ago Tim sent out his normal blog update, but this time it was a special email. It happened to be Tim's birthday and he, like Seth Godin, likes to celebrate his birthday directing his fans and followers to a good cause. Tim issued a matching challenge to anyone that would donate to Vittana. If the crowds could donate $50K he would put in another $50K and get the grand total to a $100K Birthday Present Give Away. That was pretty darn cool.

The way the site works is almost just like Kiva, only it's for students going to college in another country. You go onto the site and you get a list of students from all over the world. You read about what they are studying and you decide if you want to give your $25 towards their student loan. Works like a charm. Vittana only lists students on their site that are super committed to their education. The icing on the cake is that the students pay back their loans and you get to give the repayments back to another student somewhere else. As of this blog post Vittana has helped 3,362 students, with $2.1million loan dollars, and has a 99.8% repayment rate.

These organizations are literally the cutting edge in philanthropic innovation. Each site has cool dashboards filled with charts and graphs, which help donors give smarter and be more informed about their philanthropic choices. Most of these nonprofits also give you the ability to start a team so you and your friends can give together. As these nonprofits grow and race into uncharted territory, their new features and innovations will influence the way we give.

For those nonprofits, donors, or foundations reading this, please keep this in the back of your mind: Napster changed the music industry and so will sites like these. They have already changed the philanthropic world. The question is, has anyone noticed it yet?