Saturday, June 18, 2011

The Game-changer

By Peter McKenzie Brown
Every once in a while a computer application comes along that causes fundamental change. A great example can be found in the area of microcredit, which has the potential for transformational change in the developing world.

About five years ago two twenty-somethings founded Kiva Microfunds on a shoestring budget. In its first five years of operation, the online service connected private lenders to nearly half a million entrepreneurs in developing countries. Through Kiva’s global network of micro-finance institutions, those mom-and-pop lenders have already provided $170 million to poor Third World people whose only alternative was the local loan shark.

Kiva has unquestionably been a game-changer for micro-investment in the developing world. Until recently, nothing comparable has been available for corporate community investment.

True, most large corporations use an online grant management system – a place on their websites through which hopeful not-for-profits can request project funding. While TCPL Corporation uses this tool, community investment manager Jamie Niessen cautions that “This is not a primary vehicle for us to use in building relationships, which is what community investment is all about.”

However, he continues, “it’s a useful tool. It automatically generates e-mails. The first one says your application has been received and we will provide you with further updates. During the determination phase, if we haven’t made a decision the system automatically sends an e-mail saying your application is still in process. If we reject your request it automatically generates a rejection letter. If we approve the project, it creates a letter explaining how we will get you the funding.”

Such a function may be bloodless, but it’s practical. It’s an administrative nice-to-have or maybe even an administrative essential. Transformational it is not.

My Goodness!
In fact, according to critic Bryan de Lottinville, “many companies in the oilpatch use that software and have paid a pretty good chunk of change for it. They believe they have a workplace giving program, but they really don’t. These are legacy systems, and it is somewhat of an uphill battle to provide an alternative, even if it’s free.”

Enter software tool Goodness 3.0 – a business application developed by de Lottinville’s company, Benevity Social Ventures. Kiva it isn’t, but this tool nonetheless has the potential to change the way companies handle much of their corporate investment.

“Our approach has been to create a mechanism which enables corporate constituents to give in their own environment,” according to de Lottinville. The online application fits into places “where people and transactions already exist – for example reward programs, an employee deduction plan, a banking interface – any environment where charitable donations may be part of the goal of the transaction.” He adds, “Unlike programs (like grant management tools) that enable not-for-profits to fundraise from destination sites, ours is a business-to-business model.”

Here’s how it works. A company can integrate the Goodness 3.0 tool into a number of pages on its websites – for example, the human resources page on its intranet or the customer rewards page on its website. Users can then go into their accounts and make direct contributions to virtually any certified charity in North America.

They can create a basket of charities they want to donate to – a process that’s a bit like “creating your own personal foundation,” according to de Lottinville. “You can choose one or more charities; allocate percentages among them; set them as one-time or recurring donations. If you choose charities that the company wants to support, they can encourage you to do so by increasing the leverage available for those donations. Matching contributions take place in real-time; the donor employee doesn’t have to wait for their contribution to be matched.” He stresses that the application is inexpensive, quick and (almost) fool proof.

At this point, Randy Findley – cofounder of Provident Energy – picks up the story. An investor in de Lottinville’s company, Findley not surprisingly waxes eloquent about the potential of Goodness 3.0. “Employees are the key to your success” he says; “they can always go somewhere else. So being a better corporate citizen than your competitors is important. It helps to attract and retain employees. A program like (this) enables the company to really focus on the charitable interests of the employees. It eliminates the guesswork in respect to what charities your employees are interested in.”

It “empowers your employees to become directly involved in where their money goes. Today people are much more interested in following their dollars: ‘What are the results of my donations? How have those contributions been working?’” He continues, “If there’s a major cause you want your employees to contribute to, you can leverage your employees’ gifts (through gift-matching) to encourage them to go in that direction.”

Bryan de Lottinville adds that “part of our solution to it is to provide companies with a different way of allocating their funds. Our program enables employees, customers and other stakeholders to say ‘yes’ to many more worthy causes.” Because a company using this system is more likely to be offering matching funds rather than grants, it is an elegant tool for aligning the company’s interests with those of its employees.

The idea doesn’t just work for employees, either. Integrated companies like Husky, Imperial, Shell and Suncor could use it to strengthen their consumer brands. For example, if customers donated reward points to specific charities, they could offer to match them. They could also use these online sites to process charitable gift vouchers their customers may have received.

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