Search Results for: kiva

Kiva’s Supply & Demand “Problem”

Recently, Peter Panepento, a reporter for the Chronicle of Philanthropy wrote about my Kiva brainstorming on the Give & Take blog:

The founder of Kiva, a charity that encourages donors to make loans to needy entrepreneurs, took questions about his organization’s supply-demand dilemma during Tuesday’s weekly Chronicle online discussion.

And one of the most pointed questions came from Sean Stannard-Stocton, a financial consultant and the author of Tactical Philanthropy, who suggested that the organization change its lending terms to direct less money to the recipients of its small-business loans.

Mr. Stannard-Stockton suggested that Kiva should keep 10 percent of the pledged money as a contribution. That money would then be used to build a support staff that can identify more potential loan recipients.

Peter is an excellent reporter and someone I like personally very much. But I think the quote above mischaracterizes my position on Kiva. Here’s my thoughts on Kiva:

Kiva has a supply & demand imbalance. This is a new type of problem because historically the nonprofit/philanthropy world has not used exchanges and market based model to distribute aid. I’m intrigued by the implications of the imbalance and the precedent that Kiva will set by how they respond to the imbalance.

As reader Phil Steinmeyer points out (as does David from Ashoka), the imbalance may not be a problem but actually a huge positive. Steinmeyer writes:

I can see two sides to this:

1) If the supply/demand situation is unbalanced LONG term, then yes, they should put more effort into ways to balance things. Flannery’s response seems based on the idea that they have an excess demand (donors) much greater than 110% or so of supply (projects). But the value of taking a 10% slice for Kiva itself is NOT so much in reducing demand by 10%, but rather, in using that money to hire staff and increase supply.

2) On the other hand, if the surge in donors is temporary, it may be undesirable to change the terms. Look at the Wii – the hot video game system of the moment. It is priced at ~$250, and has been largely sold out almost since it’s release over a year ago. But part of the reason why it has been so popular was it’s attractive pricing relative to other systems (especially the PS3). If Nintendo raised the price, they could bring things into balance in the short term, but might hurt themselves long term, by losing the ‘low price’ vibe they have going.

Nonprofits are use to operating in environments where they have to chase funders, but social capital markets set up a situation where donors must compete to fund nonprofits as well. By being “sold out”, Kiva may be creating a situation where they are increasing their chances of long term success (would you rather go to a restaurant where there was always an open table or one where you had to make a reservation months in advance? Without any other information, which restaurant do you assume is better?).

But let’s assume for the moment, that the most good can be achieved if Kiva’s supply and demand is in balance long term (most markets achieve stability over time, even if in the short run they are imbalanced). My point is that the best way to balance supply and demand is to have “prices” adjust rather than by putting caps on how much supply or demand is allowed in to the system.

In response to my question, Flannery wrote:

Your idea of only sending 90% of lender money to entrepreneurs would save us 10%, which wouldn’t get us that far. Our supply/demand disequilibrium is much greater than that. Secondly, it breaks the purity of our p2p (peer-to-peer) intentions. It’s really powerful to say “100% of your loan goes to the entrepreneur” and that’s something we are not going to back away from as long as I’m here.

First I’d like to say that I agree with Matt’s point of the power of “100% goes to the entrepreneur.” But he’s missed the point of my suggestion (which is offered as a way of brainstorming, not a recommendation because I’m not in a position to second guess Matt, he understands microfinance far better than me). What I suggested was:

Another way to balance supply and demand would be to reduce the lending terms (for instance lenders only get 90% payback of their loan back with the other portion being a gift to Kiva or to someone else in your financial chain).

I’m focused on what does the lender “pay” for the transaction of working with Kiva? Currently, they pay nothing. They get all their money back, but they forego the interest they would make in a normal loan, so they do have an opportunity cost from lending through Kiva. What if they were paid negative 5% interest? We already know lenders will over supply the market at a 0% interest rate. Might some lenders be willing to accept a negative rate for the “privilege” of engaging with Kiva? Market theory suggests they would, but we don’t know how it would affect demand. Giving lenders a 90% payback would not reduce demand 10% has Flannery implies. Under this concept, you’d have to believe that a 0% payback would result in no lenders, but we know that many people do in fact accept a 0% payback (ie. a donation). Supply and demand changes with price along a curve and the slope of that curve determines how much the supply and demand changes. If the price of gasoline doubles, would you drive half as much? History shows us that demand for gas is “inelastic”, meaning that it does not change much as the price changes. What if the price of store brand cola doubled? Since it would cost more than Coke or Pepsi, demand would probably fall to zero. This is an example of a highly elastic demand curve.

We don’t know the elasticity of supply for Kiva. But I hope they experiment and find out.

Also, both Flannery and Panepento assume that anything not paid back to the lender would go to Kiva. When money is lent through Kiva, it is lent to a microlender who then lends the money (and charges interest) to the actual borrower. If the donor/lender accepted a negative interest rate, the savings could accrue to Kiva, the middleman or the final borrower. My focus is on the “price” charged to the donor/lender and how this will affect supply.

Lastly, let me stipulate again that all of this is just brainstorming. A lot of assumptions have to be made because we do not have much historical experience with social capital markets. For instance, a closer look at Steinmeyer’s example of the demand for Wii systems and the relevance to Kiva suggests that maybe Kiva lenders are not “supply” at all, but in fact are “buyers” of a luxury product. Maybe Kiva is selling “good” and lenders are buying it.

It can be a Looking-Glass world sometimes.  But that makes this all the more interesting.

GlobalGiving Weighs in on Kiva Issues

Writing on the GlobalGoodness blog, GlobalGiving co-founder Dennis Whittle quotes my recent post on Kiva.org and adds his own thoughts:

In the financial markets, there are rules that if a particular exchange is unable to execute an order, they must route that order to a competing exchange immediately.

This is from a nice blog post by Sean Stannard-Stockton. He points out that in the nascent philanthropic financial markets, there is no obligation to re-route donors to another philanthropic exchange under similar circumstances.

At GlobalGiving, we have informal agreements with a number of other exchanges, and we do refer donors to partners when it makes sense. This helps us meet our pledge to donors that they will be satisfied with their experience at GlobalGiving. It also helps our partners grow, and it generates goodwill for all involved, which pays off over the long term.

Together with a loose coalition of other philanthropic exchanges from around the world, we have been exploring whether it makes sense to develop a formal inter-operability framework. This framework might include common standards and the ability to automatically fulfill donations referred by other exchanges.

Sean is right: making the non-profit social capital market more effective means that this type of collaboration needs to be accelerated.

Kiva.org Responds

Fiona Ramsey, Kiva’s director of public relations responds to my post speculating on the implications of Kiva turning donor/investors away for lack of available borrowers to fund. Tomorrow at noon eastern, Kiva co-founder Matt Flannery will be in a live discussion on the Chronicle of Philanthropy website. I’ll post a follow up to Fiona’s comments after participating in Matt’s discussion. Just to be clear, I think Kiva is a fascinating, innovative model. I think the issue they currently face does not speak poorly of them in anyway, but I do think that the issue brings up complicated new issues that the social capital markets will have to deal with over time.

Sean:

It’s exciting for me, as Kiva.org Public Relations Director, to read your comments about one of the most intriguing parts of Kiva’s model. I agree with your comment that “Kiva?s problems are a great example of how strongly donors respond when social capital markets are created” – which is an exciting indication of how far lenders/investors will take this!

A couple points of clarification:

Kiva.org does not consider DonorsChoose.org or GlobalGiving.org to be competitors. While these models are similar in that individuals can choose the specific project they would like to contribute to, they are donations, not loans, and Kiva only facilitates loans at this time.

One element of the Kiva model that is often under appreciated is that the platform operates 24/7, so a “shortage” that exists at one time, may not exist a matter of hours later. Kiva’s Field Partners update loans for funding from the developing world as they are received, they are translated and submitted to the live site as quickly as possible. So, we can literally have a site with no funding needs one minute, and thousands of dollars with of funding needed minutes later. This is the beauty of the Kiva platform – needs being delivered from the developing world. Real-time, real people and real needs.

Of course the flip side is that a potential lender can come to the site and not find any lending opportunities at that time. However, that’s what makes the site so “addictive” for many lenders. Because you don’t know what needs will be listed an hour later, and find yourself checking back hours later to get an update.

One additional comment: there is not a shortage of people in need of a loan. What there is, is a bottle-neck. Kiva.org undertakes a significant due diligence before partnering with any microfinance institution, and it takes time to both satisfy Kiva.org’s due diligence and train MFI staff on the Kiva system. As such, the Kiva.org partner portfolio is not growing at the rate of our lender community. The other solution to building our partner portfolio is to increase the amount of funding each partner can raise (each partner has a monthly fundraising limit), but that simply wouldn’t be responsible. Kiva.org is committed to creating an online microlending platform that helps MFIs to scale only at a rate that is healthy for both the MFI and Kiva.org.

On a personal note, watching these “shortages” occur excites me because it sends a strong message to our Field Partners, that Kiva Lenders believe in their work and wish to support their programs, and to developing world entrepreneurs, that Kiva Lenders are supporting them from over 70 countries in the world, and want to give them a chance to be successful entrepreneurs.
As you said, Sean, this is a “great example of how strongly donors respond when social capital markets are created.”

Fiona Ramsey
Public Relations Director
Kiva.org

Kiva & the Chronicle of Philanthropy

Peter Panepento, who runs the Chronicle of Philanthropy’s website drops us a note regarding Kiva:

Sean:

This is an interesting analysis and you raise some important questions here.

I invite you and your readers to raise some of these questions directly with Kiva co-founder Matt Flannery, who will be taking questions on Tuesday, Feb. 5 at noon Eastern time as part of a live discussion sponsored by the Chronicle of Philanthropy.

You can find out more at http://philanthropy.com/live

Kiva.org & The Social Capital Markets II

The New York Times recently reported on the fact that Kiva.org has too much money from donors/investors and not enough people to give/lend the money to:

Over the last few months, some visitors to the Web site of Kiva, a nonprofit that lets users make interest-free “microloans” to entrepreneurs in low-development (that is, poor) countries all over the world, were greeted with a surprising message. “Thanks Kiva Lenders!” it began. “You’ve funded EVERY business on the site!!” Has a charity ever announced that it had enough money? Would-be lenders were dumbstruck, says Kiva’s public-relations director, Fiona Ramsey: “They’re stunned for a second — ‘Here I am, I have money, I want to help someone, and you’re telling me that I can’t?’ ” The note encouraged the visitor to check back soon, as a new batch of loan-seeking entrepreneurs will often appear mere minutes later. But still, Kiva is a philanthropic organization facing an extremely unusual challenge: maintaining adequate supply (people who need help) to meet demand (people who want to give it). “We don’t want people coming to the Web site who want to make a loan and there’s no one to loan to,” Ramsey says.

On Saturday, the newest edition of my column in the Financial Times comes out and in it, I feature Kiva.org, DonorsChoose.org, and GlobalGiving.org as examples of “websites have sprung up that seek to match donors with nonprofits and projects that match their unique outlook.” These sites are examples of the growing social capital market that I believe will make it easier for donor/investors to find projects to fund and projects to find funders.

I’m intrigued by the implications of Kiva’s problem (and yes, getting too much money is a problem for a nonprofit, especially if they are unable to put the money to an effective use). For instance:

  • Kiva and the other sites I mention above have different missions. But would Kiva’s mission be better served by refusing donor money or by pointing donors to these other sites?
  • Is Kiva’s mission better served by treating these other sites as competitors and not referring donors to them with the premise that Kiva can best further their own mission and therefore should hope the donors will come back later if they do not give the money first to another site?
  • In the financial markets, there are rules that if a particular exchange is unable to execute an order, they must route that order to a competing exchange immediately. Does Kiva have a similar obligation to “re-route” their clients order to another “exchange”?
  • While Kiva is different from most nonprofits, it is still striking to hear about a nonprofit organization turning donors away. Does this problem stem from Kiva’s failure to identify “demand” (people to lend the money to) or from Kiva’s success at attracting “supply” (the lenders)? If the issue is on the demand side, does this suggest that microfinance cannot address as large as a market as proponents believe? If the problem is on the supply side, does this mean that we can expect Americans to provide much higher levels of support to the social capital markets if we can find more effective ways to engage them (as Kiva has)?
  • Rather than turning people away, Kiva could change the terms of their loans so that rather than getting full payback (Kiva loans do not carry interest), only 90% of the loan is paid back. This would then make the excess supply a benefit to the borrowers. Weaker terms for the lender would drive some lenders away and bring the market back into balance through reducing supply rather than increasing demand. Is this a better idea than refusing new money? If so, better for who?

Kiva.org and the Social Capital Markets

The NY Times recently wrote about how Kiva.org has a supply/demand problem. Too many donors, not enough people to give the money to. Caroline Heine on PhilanthroMedia writes today , “the inability of Kiva.org to keep pace with its own success is just one more example of the problems caused by the absence of a “true” social capital marketplace.”

I think Kiva’s problems are a great example of how strongly donors respond when social capital markets are created. I believe figuring out how to connect donors and nonprofits via marketplaces will result in temporary supply/demand imbalances. This is a normal reaction to creating liquidity in a market that did not have it before.

Grameen, the microfinance organization founded by noble peace prize winner Muhammad Yunus opened offices in Queens, NY recently. Kiva’s problem is not that there are too few people in the world who need microfinance, but that they’ve turned on the supply spigot and need to figure out how to turn on the demand spigot.

An Idea That Spreads: Intercontinental Ballistic Microfinance

I’ve written a number of times about the tension between logic and empathy. I think it is critical that the effective philanthropy movement recognize that while data is an important input to good decision making, it can also dampen the very emotions that drive giving. That’s why I think it is critical that high performing organizations learn how to tell authentic stories about their impact. Stories that are based on solid data about what works, but which respect the role of emotion in the field of philanthropy.

Kiva is an organization that I’ve held up in the past as really understanding how to tell an authentic story that “sticks” (in the vocabulary of the must-read book Made to Stick: Why Some Ideas Survive and Others Die). The point of Made to Stick is that a good story is true, but it must also be told in such a way that it spreads. Too often I worry that the effective philanthropy movement is convinced that if they can just find the “truth” about what works, the rest will take care of itself. But I don’t think that’s enough. We need to discover the “truth” about what works and learn how to tell the story of that “truth” in a way that spreads.

Here is a new video by Kiva. The video presents data about the increasing level of microfinance loans made by the organization over time. But this ain’t no Excel graph…

(click here to watch the video if you’re viewing this in an email)

Wow.

This data is just as “true” as a simple chart like this one (which actual does represent Kiva’s loan growth from early 2006 through late 2007):

Kiva Loan Growth

In the book Made to Stick, the authors talk about how a group of food scientists spent a long time telling people about how much fat was in movie popcorn. But it wasn’t until they figured out how to tell the story of how bad movie popcorn was for you through laying out a table top covered with bacon, eggs and cake to demonstrate how much fat was in the product that people started paying attention.

First we need to figure out what works. Then we need to figure how to communicate the story about what works in a way that drives people to action. Too often, “effective philanthropy” is obsessed with the first step and ignores the second. Too often, successful fundraising is done with the second step in mind while the first is ignored.

What we need is storytelling for impact that drives people to take action in service of programs that work.

GOOD Buys Jumo, Seeks Social Connective Tissue

goodmagazineJumo is supposed to be Facebook for nonprofits. Founded by Facebook co-founder and chief digital organizer of the Obama 2008 campaign, Chris Hughes, Jumo launched with great fanfare and grant funding from the Ford Foundation, Omidyar Network and Knight Foundation.

GOOD is a publishing and marketing company “for people who want to live well and do good”. Founded by Ben Goldhirsh, the son of the founder of Inc Magazine (a hugely successful traditional print magazine), GOOD was one of a handful of “philanthropy magazines” that launched in 2007. While the other “philanthropy magazines” folded, GOOD has evolved to encompass online content, live events, and now a kind of advertising/marketing agency that helps organizations do socially connected campaigns.

Now GOOD is buying Jumo. Interesting…

First off, why isn’t Jumo working on a standalone basis? While Hughes says that the organization had a “very successful start” and counts over a million users, in all my surfing of the philanthropic web I haven’t once found reference to activity on Jumo other blog posts saying how great it is going to be.

While people like Amy Sample Ward and Beth Kanter are far better sources to comment on the technology aspect of Jumo, from a donor perspective I must say I don’t understand the drive to create a social network based around nonprofits. Nonprofit and for-profit brands may be ways that people define themselves and thus be the sort of thing that people want attached to their online social persona. But for the vast majority of donors, nonprofits are not the central way that they seek to organize their social network.

GOOD on the other hand seems to be figuring out that there is a huge interest in social sector related content, especially when it is presented as an integrated part of the fabric of life, not somehow separate from politics, business, culture, food and technology. Rather than being for “donors” or “philanthropists” or some other adjective that applies to only a slice of people’s persona, GOOD proudly proclaims it is “for people who give a damn”.

So what will GOOD do with Jumo? Speaking to the New York Times, Goldhirsh said “I’ve always felt the real potential of GOOD was to connect people wanting to take action with the organizations and businesses that could help them do that, and Jumo is the connective tissue that will allow and enable that to happen.”

We’ll have to see how Goldhirsh puts that vision into action, but I’m struck by his choice of words. Rather than seeing a social sector-social network as a standalone entity unto itself, maybe it is the “connective tissue” that ties everything together.

Let’s imagine a 20-something Millennial. She works at a for-profit company importing sustainably grown coffee that hopes to turn a profit while leveraging the power of the free market to pull people in the developing world out of poverty. She listens to U2, makes microfinance loans on Kiva and loves Apple products so much that she wears a t-shirt with the Apple logo. She’s a political news junkie and is disgusted with both parties. She makes donations to nonprofits but feels that the products that she buys, people she votes for and where she chooses to work are just as important elements of her impact on the world.

Our 20-something Millennial doesn’t define herself by the nonprofits she supports.

She defines herself as someone who gives a damn.

What she wants isn’t a special place she can visit to express her social self before returning to the “real world” of work, life and play. Instead she wants a world full of work, life and play that is built around a connective tissue that infuses all of her life with meaning.

There is no work-life balance in our Millennial’s world. No need to “give back” as if her success in life somehow extracted value that must be repaid. There is only meaningful experiences that honor the many priorities of the individual: self, family, and member of the global community (and many smaller communities).

There is great need for nonprofit oriented transactional platforms, such as Global Giving, Charity Navigator and GuideStar. But I doubt there is a need for a nonprofit oriented social network.

I look forward to seeing what GOOD does with Jumo. If they pull things off, they might just move from being a content platform for people who give a damn to an immersive experience, extending across the online and offline worlds for a new generation that views social impact as the connective tissue that connects their interests and passions.

What Can Junk Food Teach Philanthropy?

Recently I came across a fascinating article about an effort to brand baby carrots as “junk food”.

From Fast Company Magazine:

“Bolthouse Farms sells nearly a billion pounds of carrots a year… The company has been around for nearly a century now, but it boomed in the 1990s, with a breakthrough product… baby carrots were a hit… The really big deal, the thing nobody expected, was that baby carrots seemed to make Americans eat more carrots. In the decade after they were introduced, carrot consumption in the United States doubled.

Then a couple of years ago, after a decade of steady growth, Bolthouse’s carrot sales went flat… So the company brought in Jeff Dunn, the former head of Coca-Cola’s businesses in North and South America.

Dunn was clear: He didn’t want a health campaign, one that talked about beta carotene or cutting calories. He wanted something more emotional, maybe something funny, something that appealed to impulse rather than responsibility — the kind of thing a soft-drink or snack-food company might do.

[The ad agency] unveiled storyboards with concepts for a series of winking, self-aware junk-food ads. One ad featured a baby-carrot-branded spray tan, endorsed by Snooki, the star of MTV’s Jersey Shore… In another, a sultry model, surrounded by billowing black silk, runs a carrot slowly across her lips as a voice-over purrs about indulgence — think Dove chocolates. The best one seemed inspired by a Mountain Dew commercial. A skater dude rides a jet-powered shopping cart through a desert pass, dodging baby-carrot gunfire. Things blow up. There’s a pterodactyl. "Extreme pterodactyl!" the voice-over yells."

"People will say, ‘You open the bag, it’s just baby carrots.’ Well, it’s just Lay’s potato chips, it’s just Doritos, there’s nothing special about them," he says. "They’re just cool and part of your life. If Doritos can sell cheeseburger-flavored Doritos, we can sell baby carrots."

By November, sales in Bolthouse’s test markets were up 10% to 12% over the year before, compared to minimal improvement or slight decline in a control group.”

In the article, Dunn reflects on his conflicted feelings about having promoted high consumption of Coca-Cola and the direct link between soft drinks and obesity. It is clear that he sees his effort to promote a healthy product, at the expense of true junk foods, as a kind of redemption process.

The article got me thinking about the most effective way to promote philanthropy. For the last hundred years Americans have given about 2% of income to charity. This percentage has been remarkably consistent during good times and bad. Maybe the key to increasing the amount given to charity is to get away from the “give because it is good for you” (good for your soul, good for others, something you “should” do) approach and embrace a philanthropy as junk food mentality?

Is the fast growing Kiva.org, that addictive little website that has captured the hearts and minds of 500,000 Americans from every walk of life, a sort of philanthropy junk food (I’ve called Kiva a gateway drug to social finance in the past).

Studies show that giving to charity triggers the same neural pathways as drugs, chocolate and sex so maybe marketing philanthropy as a junk food isn’t false advertising but actually closer to the truth than the moralistic “it is the right thing to do” approach that is so often preached.

I’m not convinced in the least that a philanthropy as junk food marketing approach would succeed or is even the right thing to do.

But it sure is intriguing…

Groupon: A Billion Dollar Social Enterprise?

Andrew MasonGroupon is the fastest growing company in history. Just two years after launching the company reportedly turned down a $6 billion acquisition offer from Google. But what many people don’t know is that Groupon was launched by a social entrepreneur.

Back in 2007, 26-year-old Andrew Mason was working away on a website called The Point. The concept was that people would pledge to take some sort of social action – give money, volunteer, join a campaign – but they would only follow through on the pledge if a certain number of other people made the same pledge. This allowed someone raising money via The Point to tell a potential donor that they could pledge $100, but would only have to make the gift if at least 100 people made the same pledge. In this way the donor would know that they would only have to give the money if the nonprofit was going to get $10,000 and fully fund the project.

The Point quickly joined Social Actions and during the FORGE event in late 2008, Andrew approached me about setting up a Tactical Philanthropy community project on The Point.

It turns out that just about the same time, Andrew was launching a little side project called Groupon that would apply the tipping point concept to buying discounted goods and services. That little side project exploded in popularity and the now 29-year-old Andrew is the CEO of a multibillion dollar company.

But Andrew’s social entrepreneur roots are still solidly in place. The Point is still operating and recently Sharon Schneider argued that Groupon might be the most successful social enterprise ever. Sharon’s argument rested on the fact that Groupon deals are not just for restaurants and spas, but also drive increased traffic to nonprofit museums, offer discounts on local sustainable food and other products and services are offered by nonprofits or result in some sort of social good. For instance Groupon has offered deals on Kiva.org microfinance credits (which Oprah pointed to as a “best holiday gift”) and offered what was effectively matching funds for donations via Donorschoose.

Now Groupon is focusing directly on social impact activity. Since Groupon has dramatically higher brand awareness than The Point, the two organizations have teamed up to launch G-Team on the Groupon website.

Here’s how Groupon explains the new platform (Andrew is known for his sense of humor, telling the NY Times during the rumored Google takeover that he couldn’t talk on the record with them unless they wanted to talk about his true passion… miniature dollhouses):

“Long, long ago (2008), Groupon was born out of a group action and fundraising platform called The Point. As the Groupon community grew, our collective consumer power helped people get great deals and discover fun ways to experience their cities.

After a desert vision quest where we invoked our ancestral spirits, we are repossessed with The Point’s powers. Newly inspired, we’ve devised a way to connect Groupon users with their communities in a different way—with G-Team. Groupon followers who want to do good, have fun, and make a real impact can now join forces through G-Team campaigns.

G-Team campaigns range from ridiculous flashmobs to fundraisers that benefit local community organizations. Every G-Team campaign connects you with enough people to achieve something awesome that you couldn’t have done alone.”

G-Team isn’t just replicating The Point, it is combining the offering of Groupon and The Point.

One of the examples explaining the service is a Groupon discount where buyers can get an $80 bike tune-up for just $35 (so long as enough people sign up). However, since this is a G-Team joint effort with The Point, the offer also includes the fact that if the discount tips, a local bike cooperative will fix up 100 broken bikes and donate them to disadvantaged youth.

In some ways, G-Team looks like a cleverly designed corporate philanthropy effort. One in which Groupon gets “good karma” credit for the social good offered by the companies that use their service. But unlike much of corporate philanthropy that is almost wholly disconnected from the for-profit activities of the company, G-Team seems perfectly aligned with the strengthens of Groupon.

I’ve written recently about Facebook founder Mark Zuckerberg’s philanthropy. But with Andrew Mason we have a true social entrepreneur who seemingly stumbled into an unbelievably profitable business venture. While Zuckerberg and other signers of the Giving Pledge should be rightly applauded for their efforts to give money generated in business to social impact organizations, the next frontier is business leaders who figure out how to embed social impact into the DNA of their profit engine.

With the launch of G-Team, which has the potential to deliver social impact as well as increase revenue for Groupon, we may be seeing the emergence of a multibillion dollar social enterprise.

(A special thanks to Christine Egger for pointing out G-Team to me)