Presentation on Microcredit (2/20/2005)

I had the opportunity to make a general presentation on microcredit, Mifos, and the Reuters Digital Vision Program Sunday at the First Congregational Church in Palo Alto. Jeff Mattan, who was the first volunteer to help with the project, and I spoke for about 45 minutes, fielding a great range of questions from an audience of more than 30 people.

The presentation is available as a PowerPoint Show. (I see that slide "builds" don't get captured here, so in slide #15, The Challenges of Microcredit, you don't see the red arrows pointing at "Information Systems" and "Capital" as the two key areas that computers can help to address.)

RDVP Seminar: Elisa Camahort (2/16/2005)

Elisa Camahart, the "Queen Bee" of WorkerBees, spoke at the RDVP Seminar, on using blogging as a corporate marketing tool. Her comment was that blogging was not a revolutionary new breakthrough, but rather a new way to do traditional corporate marketing. The “blogging elite” are doing a disservice by introducing this as something revolutionary: It’s not the death of PR or old media, rather a complementary way of performing those services. It’s asking the same questions that traditional marketing asks: Who are you attracting? Why are they coming? What do you want them to do as a result of their visit?

If the conventional wisdom is that blog entries need to be full of links, short posts made daily, and obtain a large readership (to support themselves with ad revenue), that’s making assumptions about what you are trying to do and who you are trying to reach. Elisa asked "If people are coming to your site just to click through on a bunch of links that you found interesting, are you gaining any real mindshare from them?" This approach is antithetical to what companies are traditionally trying to do to communicate with their customers and stakeholders.

Elisa cited 5 attributes of blogs that make them interesting:

• Immediate
  
• Accessible
  
• Interactive
  
• Informal & "Insider"
  
• Inexpensive

She cited some of the common ways of building traffic: Blog rolls, Blog Rings, and tracking back. While these are one piece of a traffic attraction strategy, they don’t really impact the reader. Rather, having an engaging "voice" and connection with the reader, along with freshness are what really keep people coming back, the elusive "stickiness" of the website.

We talked a bit about some of the intellectual property questions: who owns the material of posts (the author? the hosting service?) What about comments? The commentor? The original author? The hosting service?
We talked about the different functions of blogs, including:

• Marketing and PR (distributing trackable offers, for example)
  
• Customer Support and Service
  
• Project Management
  
• Education and Training
  
• Publishing and Evangelism (a CEO's blog)
  
• Customer Outreach

We talked a bit about the benefits of syndication (convenience for the reader, but also to the publisher for creating multiple feeds that share common information elements), noting, however, that most syndication obscures the readership to determine whether people actually read it.

Elisa mentioned Corante, a company that provides research on blogs and their usage as well as a company that provides blog-based tools for project management (which Mans later identified as BaseCamp. She also talked a bit about the perceived value to her customers, who had a harder time justifying the market-writing hourly rates, even though the value is probably greater than that of the traditional white paper.

Mans raised some good points about the hazard of relying on information sources that lack editorial compunction. They may have commercial motivations that are not disclosed, there may be little reason to ensure accuracy or refrain from sensationalizing in order to attract traffic.

RDVP Seminar: Scott Smith (2/9/2005)

Scott Smith is an attorney who handles corporate work, and has helped past fellows from the RDVP with the incorporation and application for tax-exempt status for organizations growing out of RDVP projects. In a conference call he explained:

Different types of non-profits

• Unincorporated Association (people working together, but not a legal entity)
  
• Charitable Trust (assets held for public benefit, such as a land trust)
  
• Non-profit corporations, further broken into
  
  
  • Public Benefit Corp. (with a charitable purpose, restricts how assets can be distributed to members, but allows tax deductions for donations)
    
  • Mutual Benefit Corp. (for benefit of members, like a trade association). On dissolution, assets may be distributed to members. Income may be tax exempt, but donations are not.
    
  • Religious Organization

Incorporation Process

1. File articles with the Secretary of State (includes name, purpose, and agent of notice) Generally a boilerplate document, with a $30 filing fee
   
2. Pass Bylaws (specify directors, officers, authority of each). Also generally boilerplate.
   
3. Hold initial Board of Directors Meeting: elect officers and directors, choose bank and fiscal year, authorize directors and officers insurance
   

Tax Exemption Process

1. Get a Taxpayer ID Number (Use form SS-4)
   
2. File exemption with IRS, for 501c3 (Use form 1023). Takes 5 to 8 months for processing. The grant is retroactive, so if the application is approved, donations received while the application is pending are appropriate deductions.
   
3. File exemption with California Franchise Tax Board (Use form 3500). While California may take guidance from the IRS decision, this is still a separate requirement.

Relations between non-profit and for-profit and overseas organizations

A non-profit may have a for-profit subsidiary, but if it's deemed the for-profit is actually "in charge", there may be problems. While it's relatively easy to change from a for-profit to a non-profit (in the extreme case, the for-profit just donates all its assets), the reverse is probably impossible. Greg pointed out that if the concern is over ideas, it's possible for the non-profit to license the IP to the for-profit.

While Scott warned us against the hazards of Unrelated Business Taxable Income (UBTI), which is subject to excise tax, it sounded as though most of our ideas to build sustainability would not be "Unrelated", and therefore not a problem. Scott cited the example of debt-financed income property as a common case of UBTI.

A non-profit can support people outside the US (charitable purpose can be anywhere in the world), and it's not uncommon for their to be a US-based organization that acts as a representative of a foreign-based organization (Dipak offered the example of Oxfam).

Factors which may cause a 501c3 application additional scrutiny

• A single donor (or a small number)
  
• A small beneficiary population
  
• International (esp. post 9/11)
  
• High compensation for board or officers
  

NPR "Forum" on Microcredit (2/4/2005) with Sam Daley-Harris

One of the cool things about being associated with a topic
like microcredit is the way lots of people send you pointers to
articles in the popular press. So while the RDVP fellows were at
Asilomar, there was a program on NPR by Sam Daley-Harris of the Microcredit Summit. The
51 minute program in Real Media format (See Friday, Feb. 4th at 9:00 AM) is a great introduction to the area of microcredit, with a focus on some of the organizations that support microcredit, especially in the US, and a view of the history and economics of microcredit, as well as a balanced view of some of the criticisms leveled by skeptics.

RDVP Seminar: Steve Mushero (2/2/2005)

Steve Mushero came to address the fellows about the topics of developing economies and having NGO's as customers. As a global technologist who creates systems for things like disease tracking, Steve has experienced first hand the challenges that many of us are facing or will be facing as we move from the planning phase to the execution phase. Many of those complexities come from the messy details of the real world that don't make it into the abstract systems that we design for. Just to mention a few, Steve talked about how wars impact Geographic Information Systems (GIS):

• Disputed boundaries
  
• Overlapping governments
  
• Unclear authority of who owns the data or gives authorization to release
  
• Refugee populations
  
• Towns that move to safer locations
  

Working with NGO's can be hard as well, as they often:

• Have different expectations than the business world
  
• Expect alignment at the mission level
  
• Are composed of volunteers who may have more passion than experience
  

Regarding specifically the technology infrastructure:

• Managing support for people far away, from a different culture, who speak a different language
  
• Insecure computing environments where viruses and spyware are prevalent, with fewer trained system administrators to manage the machines
  
• Harsh operating conditions for hardware (intermittent power, extreme temperatures, sand) and difficulty in getting replacement parts
  

Steve advocated a very participatory design and prototyping process. Users don't know what they want or what's possible until they see it (or a near miss). But it's hard to design a system to do a job until you can do it yourself. "Miracles happen when you send engineers out to actually do the job," he said. He also argued for maintaining simplicity and reliability, striving to be at the sweet spot of the 80/20 rule, getting 80% of the benefit for just 20% of the total system work. Defensive programming (including diagnostics and startup tests) can help to reduce work in the long run.

Question from Mans Olof-Ors (1/31/2005)

Mans Olof-Ors wondered why the US military-industrial complex is called the defense industry. He asked:

       Shouldn't it be called "the attack industry"?