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Crowd Funding: The Impact Equation

Small Amounts, Large Participation

The term crowdfunding has become one of the most googled words in 2013 – which makes sense since the former President of Google Enterprise, Dave Girouard launched a crowdfunding  service called Upstart a year ago. He isn’t the only one – it is estimated that there are currently well over 300 crowdfunding sites globally.

The business model works like this:

Small amounts donated + Large amounts of donors = Enough to start something cool

This formula has allowed bands to fund the albums of their dreams and might allow Veronica Mars fans to get the movie they have been waiting for. But is that the limit of the potential? Or does the business model and platform have the ability to morph into something bigger?

Future business model could look like this:

Sizable donations + Business/consumer donor pool = Massive community impact

This might be hard to wrap your head around because crowdfunding in its current form is working and working well. Kickstarter, Indiegogo, and Kiva have all experienced tremendous success, mostly because the concept is simple. Explain your idea in a compelling and creative manor, and hope individuals and in some cases, companies will invest in your idea (and you).  And the more compelling or entertaining the plea (usually always through a video), the more funding seems to follow.

See below for the first project I invested in – simply because I loved the approach and their storytelling ability.

Small Amount, Good Intentions

Nonprofits have been using the crowdfunding  concept for years to raise money for community projects, but the platform was never open – donors had to contribute via the nonprofit’s website.  But now nonprofit crowdfunding platforms have started to emerge. StartSomeGood allows for fundraising for nonprofits and helped Boston Strong reach a campaign goal for its wristbands. And piggybackr helps kids raise funds for projects they are passionate about.

But Crowdfunding has yet to be embraced by established nonprofits that rely upon traditional donor cultivation to reach their fundraising goals.  Their Resource Development departments spend countless hours developing strategies to attract and engage new donors. To them, crowdfunding has the potential to steal long-term donors away and push them back towards campaigns and one-offs that don’t achieve impact or work towards a sustainable giving model. Marketing and community awareness teams love the possibility of using word-of-mouth and a true grassroots model to fund a project that is creative and can garner media and community awareness easily. But these projects can be time suckers, costly and can generate attention but not always ROI, which causes concern among senior leaders.

Big Amount, Big Intentions

But are there bigger opportunities that satisfy bigger goals? Instead of large numbers of small donors, what if we could persuade a large number of large donors to invest in solving a big problem for good?

Let’s look at a bigger problem. Educational gaps in urban areas continue to be the driving force behind explosive dropout rates and failing economies. And if we know one thing about educational outcomes – there is a pattern.  Children of parents who have dropped out of high school are more likely to drop out themselves.

And my city – Cleveland – has reached a point of academic emergency.

How can crowdfunding play a part in the solution? What about funding a movement that helps erase educational gaps for children born in 2014 in urban Cleveland? Research shows that children from inner city areas enter kindergarten 12 to 14 months behind their suburban peers – because they can’t afford or don’t have access to high quality preschools that prepare them to enter kindergarten ready to learn.

The Impact Story Problem

Raise enough funds to ensure all children born in urban Cleveland in 2014 had access to one full year of high quality early learning leading into kindergarten.

  • There are an average of 15,000 children born in Cleveland every year
  • The average cost of early learning education for one child for one year is $7,000
  • This means that we would need to raise $105,000,000

Quite a fundraising goal?  Yep. Impossible?  Nope.  Look at it this way — the company Allerta raised a total of $10,266, 845 in less than a week for Pebble, an ios/Andriod based Smartwatch.

What if the companies and families with means in Cleveland focused some of their charitable gifts to this crowdfunding project?

  • There are currently 21 manufacturing companies in Cleveland, OH that are sitting on the Fortune 500 list.
  • The combined revenue for three of the largest – Parker Hannifin, Eaton Corporation and Sherwin Williams is roughly 36 billion annually.
  • Two of Cleveland’s wealthiest families have donated more than 108 million to local hospitals and colleges in the past ten years.

Not such an unsolvable problem now, is it? And consider the ROI:

  • Give 15,000 children the educational exposure needed to start kindergarten ready and prepared
  • Add in the County initiative that donates $100 to those same children for a college fund (that can grow and accrue)
  • Break the cycle of intergenerational poverty.  If the children born in 2014 even see a graduation rate 10 percent higher than what it is now, the long-term effect could be monumental.  Educated parents push their children to achieve educational success.

And so the new cycle begins.

Now I’m not suggesting that my simple-minded math equation will actually work – as it is conceptual in theory. But I am suggesting that we start to look at crowdfunding platforms to tackle massive community problems in many different ways.

With large scale impact now a part of the equation, our Resource Development team has a fundraising goal they can stand behind, our Marketing department has a news story that CNN and Good Morning America would fight over and our community has a budget able  to eradicate massive social problems.

Now that’s a crowd I think we could all follow.


The Power of the First Follower

Disruption as a team sport.

Imagine the power of bringing together an established organization that encourages large scale disruption from the inside out and a team of disruptors that know how to take advantage of that organization’s economies of scale, established market share and expansive reach to solve big problems for good.

One lone disruptor with an idea working on the outside alone may lead to innovation.

One lone disruptor with an idea working on the inside with others is a movement.

It takes courage to join in. 

Watch as Derek Sivers shows us how one lone shirtless dancing guy became the leader of a movement.

At first blush, it may seem that this is the story of a lone disruptor – the shirtless dancing guy with the “guts to stand out and be ridiculed.” But Sivers digs deeper.  This is the story of a shirtless dancing guy that catalyzed a movement because three things happened:

  1. A first follower joined in. He immediately transformed a “lone nut into a leader.” 
  2. Our leader embraced the first follower as an equal. He understood that is was not about him, it was about the movement. 
  3. The first follower encouraged others to join in. Making others feel comfortable participating created the momentum needed to push beyond the tipping point to an actual movement.

Are parents our shirtless dancing guy?

The most critical time of learning occurs before a child ever sets foot in Kindergarten.

This means that the family home is a child’s first classroom.

This means that parents are a child’s first teachers.

This means that these first 2,000 days – from birth to the first day of Kindergarten – are all we have to get a child ready for success in school and life.

This means parents have that same 2,000 days to get ready to be good advocates for their child and partners with teachers throughout their child’s academic career – from Kindergarten through high school graduation.

This means every day counts!

Parents are the game changer. If they stay in the game, we all win. But they don’t have to do it alone.

What if we treated parents like they were our shirtless dancing guy?  We see them out there dancing on the lawn every one of the critical first 2,000 days of their child’s life. The question is do we have the courage to join in?

A powerful following.

This week, we launched our 2,000 Days Pledge.

We asked parents to take the pledge – to commit to making every day of the first 2,000 count for their child by doing three things:

  1. Keep their child in a high quality early learning program for as many days as possible during the first 2,000
  2. Partner with their child’s teachers to get their child ready for Kindergarten with the goal of high school graduation
  3. Choose an elementary school that is high performing and compatible with their child’s learning style and needs

In return, we took the pledge – we committed to making every day of the first 2,000 count for their child by doing two things:

  1. Partner with them to get their child ready for Kindergarten with the goal of high school graduation
  2. Help parents get ready to be an advocate for their child and good partners with their child’s teachers from Kindergarten through high school graduation

The response has been overwhelming.

  1. Within five school days, we have one site fully pledged — all 50 parents — and the others are not far behind
  2. One father cried as he signed the pledge and told us, “I can’t wait to explain to my daughter when she is older that I took this pledge for her.”
  3. We have been bombarded with requests for more pledge pins, pledge cards and materials because our parents and teachers are so proud that they have taken the pledge and want others to know about it
  4. We have seen fantastic engagement and feedback on our Facebook page from parents explaining how important the pledge is to them and our community

Parents and teachers as true partners in the educational success of children. Courageously dancing on the lawn together. Disruption as a team sport. Innovation inside!

How are you harnessing the power of the first follower?

Rather than catalyzing change by leading, how can you create a movement by following?


Make a Choice to Institutionalize Disruption

Institutionalize = establish as normal

 Disruption = interrupt what is normal

Redefining Normal:

Is it possible to institutionalize disruption?  To establish a new normal that is expected to be ever-changing and constantly evolving.  Not only is it possible, but innovation inside our largest companies, nonprofits and government at all levels depends upon it.

Unfortunately, it’s not happening often enough.  Only 1% of companies drive 40% of new jobs, and only 1 in 10 sustains growth. In the last 50 years, companies have driven productivity improvements and grown through acquisition, but few have sustained innovation (High Growth Firms, The Innovator’s Solution, The Alchemy of Growth).

Why?  Winston Churchill said, “To improve is to change; to be perfect is to change often.”  Most of us want just the opposite.  Our brains are wired to seek coherence, structure and order.  We want to cut through complexity and settle into routines.  We want to find patterns – things we can predict and count on.  We know all too well that life is full of surprises, but we still want guarantees.

 Redefining Contradiction:

So if it’s human to seek order, and innovation depends upon disorder, what’s a CEO to do?  I’m sure someone soon will come up with a framework, formula or 5-point plan for institutionalizing disruption, but it won’t be me.  I don’t believe one exists, and by definition, it shouldn’t. Institutionalizing disruption is not something you create.  It’s something you choose.  It’s a choice that you and your team must have the courage, creativity and faith in each other to live and re-commit to every single day.

We live in a world marked by contradictions, so CEOs must learn to lead at the intersections.  In the places where opposites attract.  Where uncommon becomes common.  It is in those open spaces where it becomes possible to institutionalize disruption.

Consider what could be achieved within your organization if you were a leader that:

  • Valued the success in failure
  • Helped your people feel secure as you push them out of their comfort zone
  • Encouraged acting with heart and business savvy
  • Expected everyone on the team to lead
  • Created job roles to fit the best people you can find, rather than finding people that will conform to the jobs you create
  • Anticipated set backs as normal occurrences and measured success based upon recovery time
  • Recognized that people do better when they integrate their work and life, rather than leaving them to struggle with the myth of “work-life balance” on their own
  • Hired people for what they know and what they don’t know
  • Searched for people that believe what you believe, not just that can do the job
  • Never let a serious crisis go to waste by making the most of the opportunities it creates

Redefining Leadership:

To institutionalize disruption, you must be a leader that knows the “road to awesome” is paved with rocks, thorns and glass – the ultimate contradiction and leadership challenge of our day.

But as NBA basketball star Jason Collins so bravely reminded us today, when we choose the road less traveled, we don’t have to walk it alone.

How are you institutionalizing disruption in your company?

What are the contradictions that you deal with every day?

How are you and your team leading at the intersections?


A Lesson Plan for Disruption

Imagine our BEST courses taught by our BEST professors from our BEST universities provided to everyone around the world…FREE. This is not a future aspiration. It’s happening today in some of our nation’s most prestigious institutions of higher education. They are called MOOCsMassively Open Online Courses – and they’re disrupting higher education from the inside out.

Not Your Mother’s Online Course

I only recently learned about MOOCs because Case Western Reserve University is about to join the revolution, and my community is talking about it. Case’s first MOOC – “Inspiring Leadership through Emotional Intelligence” – will begin on May 1 and will be taught by renowned professor and best-selling author Richard Boyatzis. Has anyone signed up yet? Only about 50,000 students from around the world and counting! A virtual classroom larger than many small towns, and every student with an “all access pass” to one of America’s most prominent educators for FREE.

Online courses are not new, but MOOCs take the power of self-study to a whole new level. Daphne Koller of Coursera, making the case for MOOCs in her June 2012 TED Talk, explained the disruptive power of combining self-learning, learning by doing and community building among learners all over the world.

For professors, MOOCs offer a way to have a more immediate and wide spread impact on the world – instead of teaching a few hundred students each year, professors are reaching hundreds of thousands of eager minds in that same time period. For students, MOOCs free them from artificial access barriers and “one size fits all” modes of learning. They can engage in a real course experience that is interactive with the professor and shared with a global community of students – all on their own time and terms, and free of charge.

Beyond the College Classroom

And not surprisingly, MOOCs are stirring up both strong support and vocal opposition. I’m not here to take sides in the debate. For me, it’s more about identifying the outside lessons we can learn from this innovation inside higher education. How can the learnings of the MOOC revolution accelerate our ability to finally break down barriers to access and choice beyond higher education? Here are a few that come to mind:

  • A Different Kind of Tutor. The cost – both in terms of dollars and time – to teach a first-year college student what he should have learned in high school is a huge barrier for students and universities alike. Could MOOCs be the answer? The Gates Foundation has teamed up with 10 universities to develop introductory and remedial MOOCs targeted to increasing the college completion rates of low-income and first-generation college students. This literally could open all the doors to higher learning. But, this is worth watching for another reason. What about the implications at other critical transition points in education? If we dive a bit deeper inside…
    • could MOOCs level the educational playground completely, starting with our rising Kindergartners?
    • could MOOCs help young children through the 3rd grade reading guarantee despite the damage done by substandard pre-schools and low performing primary schools?
    • could MOOCs decrease the cost of expensive remediation and increase the rate of high school graduation for rising 9th graders?
  • Parents as First Teachers. We know that a parent’s educational level, particularly mothers, impacts the level of education her child aspires to achieve. MOOCs may never replace the benefits of an undergraduate or graduate degree, but could they re-introduce parents to life-long learning for the benefit of their children? Could MOOCs open the minds of parents who believe that the door to life-long learning is closed because they don’t have the needed grades, test scores, money, time or proximity to campus to make college a real option in the first place? Could MOOCs make it possible for parents to raise their own educational level in a way that is meaningful to their children and doable within the constraints of their jobs, income and family responsibilities?
  • The Human Touch. MOOCs aren’t revolutionary because of the technology. The real innovation comes from how MOOCs combine the technology of on-line courses with the impact of human interaction. What are the lessons for other areas where real access lies at the intersection of technology and human relationships?
    • Access to Health care: Imagine the possibilities if your care coordinator could visit you at your home with her IPad and your doctor joining you via Skype? (Disruption as a Team Sport … in Health Care)
    • Access to Job Training: Imagine using a “flipped” classroom model, where job seekers watch video lessons at home and spend time in the classroom actively honing their soft and hard skills with industry instructors and hiring managers.
    • Access to More Time: For those of us that spend far too much time during the work day in meetings, imagine the productivity that could result by having every participant interact with a pre-meeting video and walk in with the same baseline of knowledge and clarity about the problem to be solved.

Inspiration U

Imagine the wave of innovation that could occur by removing the access barrier to inspiration. Shimon Schocken in his recent TED Talk showed the value of MOOCs for the many people that do not need or want the course credit or grades, but want to be inspired. “Grading takes away all the fun from failing,” says Schocken. For people with a passion for learning, grading is “degrading” while MOOCs are “upgrading.”

Thomas L. Friedman, an important voice in the debate, ended one of his recent New York Times’ articles on MOOCs this way:

When outstanding becomes so easily available, average is over.”

Igniting passion, changing the world.

Class dismissed.

Disruption as a Team Sport … in Health Care

Good health directly impacts our potential for success – our readiness for school, our productivity on the job, our quality of life and even our length of days.

The conversations about access to health care that have been dominating the news lately center on our ability to pay — who has health insurance? what does it cost? who is eligible for Medicaid? how can we afford to expand Medicaid to the uninsured?  how can we afford not to?

After funding, our access to health care is wholly dependent upon one thing — our ability to get to the doctor’s office.

Why are we letting our proximity to a doctor’s office and the transportation available to us dictate our access to health care?  The answer to this question is leading to innovations that could completely transform the entire health care industry from the inside out.

I re-posted a yesterday that Eric Dishman gave at Ted@Intel where he discussed how new technology can change how we deliver health care to…anyone.

Telehealth has the potential to both improve our health and reduce the cost of health care for all of us. Imagine the possibilities for impoverished urban and inaccessible rural communities, and the value for prosperous, connected communities all around the world.

Even more exciting is what we could do at the intersection of technology-based and relationship-based health care. Imagine your care coordinator visiting you at your home with her IPad and your doctor joining you via Skype. Imagine going to your family doctor and having a specialist in another part of the world join your conversation about your options through video-conferencing.

New technology continues to breakdown the walls that block health care access for everyone. But the true innovation will come from within the walls of the health providers and organizations who use that technology to transform how they create a relationship with a patient that has no access boundaries. That is Innovation Inside.

What are your thoughts?

How technology can empower patients, including 4 diagnostic tools for your iPhone

TED Blog


Eric Dishman is used to thinking about how technology can transform the world of health care. As an Intel Fellow and general manager of the company’s Health Strategy & Solutions Group, his job is all about finding innovative new approaches to healthcare. [ted_talkteaser id=797] And he’s no stranger to talking about them. At TEDMED 2009, in the talk featured to the left, Dishman asked us to “Take health care off the mainframe,” boldly comparing the current American health care system to mainframe computers circa 1959.

But just two weeks ago, at TED@Intel, Dishman tells the much more personal story of his battle with kidney disease.

To say that his battle is with disease isn’t the full story. Instead, as he describes in this second talk, his fight is not only with faulty kidneys, [ted_talkteaser id=1711]but also with a flawed healthcare system.

Two decades ago, when he…

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