Hello! Our last economic sustainability session will be more conversational thanks to our panelist, we will be mixing it up for a bit. This is Evonne Heyning and I will do my best to liveblog this session as it flows.

Panelists:

Anita Figer, Nonprofit Finance Fund, hired by foundations to look at economic sustainaiblity of nonprofits

Susan Walters, California Emerging Technology Fund, broadband technologies in low income communities Panel leader: Ask tough questions! Don't be afraid to share what you think.

TAKING IT GLOBAL

Introduction on the project: TIG runs an online community to promote online awareness and social responsibility among youth. We mainly generate income through 50% earned income and 50% philanthropic funding, but somewhat a blur. Some foundation funding is earned income related to an issue page. Earned Income; companies pay fees to customize our online tools, and we will be looking at automated off the shelf solutions long term. We also have an educator platform and schools pay a fee ($35,000 for licenses last year). The P2P youth network membership will in the future help generate revenue with options like a premium membership or a fund that will generate from the community. Citizens bank/VISA may help us design a card where money per transaction will go back to TIG. Merchandise and other options have been considered, along with online workshops and conferences. Costs: 30% tech, 33% content, 25% travel and events, 12% operating costs.

Susan: Competition, how do you size up the competition?

TIG: Our site allows for diverse tools and interactions. We see it through the lens of partnerships, leveraging the strengths of other organizations. We are not interested in banner ads; we want strategic partnerships that are suitable with the mission. Having more groups entering this space validates what we're doing; if we can help to bring in content from what they're doing and find partnerships.

Youthnoise? We work together with youthnoise and have a live chat on our website; we worked together to coordinate americans discussing the VA Tech violence last month.

One of the differences of TIG is our international nature; we are in 12 languages.

Susan: Usage, what does your membership look like?

TIG: 1,000,000 users, 150,000 registered members, 10% have logged in for the last month. 24 minutes per visit.

Anita: And your impact, is it measured by length of time on site?

TIG: We look beyond metrics and activity on the web. We've conducted different surveys to find out about volunteerism in the community, increasing a sense of confidence and efficacy by their actions with TIG. 50% have taken action to change something in their own life. One of the goals is to catalyze young people to develop initiatives of their own to strength other causes. We want to strengthen the field and sector and lead that vision long term; how can we bring youth into advocacy with governments, UN and civil society groups and youth caucuses with greater depth, expanding their network so that youth have a voice. We create the broader space for youth to connect with opportunities.

What lessons have you taken from social networks on your media property; cpm, ad networks. There are brands and advertisers that want to be there, what are you doing to take advantage of that?

There's lots of traffic but having no advertising helps it to be a nonprofit. We are looking for strategic alignments, not ad words or banners.

Susan: Teachers platform?

TIG: That's purchasing a license but there's no brand awareness attached. When we work with Microsoft for online safety that was cobranded; when people were looking for different ways to protect themselves and their computer we've retained editorial control to show a balance from all sides. We've also worked with UN Food Program and we want to work across sectors.

Audience: Do you work with Scholastic or educational ministries? Scholastic seems to be all disney and most classrooms are relying on these curriculum supplements.

TIG: We have been featured in at least five different textbooks, civics and social science classes in different countries. It has been very reactive; we have not been proactive yet. We would love a connection with Scholastic.

Audience: Resource generation, grantmakers without borders, YouthGive?

TIG: Let's follow up with some of those funding sources. We've been talking directly with YouthGive.

Audience: The competitive question: there is a great deal of overlap with other projects around the world and here in the room, many dozens more. How do you beat back the vast number of people running to this space?

TIG: Social networking sites are driven by the community and members. We do want to combine a bottom up and top down facilitation approach; we curate content and disseminate information in a proactive way. Our goal is to help our users expand our horizons; if you're going into it with a certain mindset you may not be encouraged to push out of comfort zone...we want to push our users to another level. Most SNS do not offer this challenge, nor do they focus on the inspiring stories that come together when people get involved.

Anita: Government as a source of funding; you've had great success with the UN. Please talk to the other groups here!

TIG: We'd be happy to make connections. We're happy to work with all types.

We've been partnering with many groups, writers, MacArthur Foundation Digital Learning books...these are also income sources also.

GRASSROOTS.ORG TOOLBOX

Introduction: Angela Siefer, executive director, and Dave Chakrabarti.

We are developing an online suite of tools for grassroots nonprofits. We are hosting and configuring these tools. Sustainability: $300,000 cash budget and $100,000 in inkind services donated each year. Half goes toward staff and everything else stays very low. Almost all of our donations are individual donations and we look forward to diversify. We have not yet gone to fee for service beyond the CMS provided will have a custom version with a fee charged. We want to look into other options; we look forward to building a long term sustainability plan with partners met here at N2Y2.

Anita: To a nontech person you seem quite similar to a number of the other programs here. Do you collaborate with Kabissa, SSC/Aspiration, other groups here? When I see great ideas I wonder why more groups do not merge to capitalize.

Angela: Our tool is quite different than some; we work with many nonprofits to make sure we are not duplicating. We spend a lot of time looking at what's already out there and we went after our niche; the nonprofits without tech onboard and are very small.

Susan: When I look out there many organizations are doing what you're doing. You can look at a niche and there are a lot of nonprofits like that out there; it would make more sense to look at the market size and see how there's room for everyone.

Angela: There are many out there but ours is different; many are local organizations and we empower them.

Susan: But look at CitySoft and ASP versions of e-advocacy. At the end of the day...

Dave: We currently have 800-900 organizations hosted for free online. They ask for how do we update our websites; they need a basic CMS. Drupal is a powerful CMS and it's free but orgs are not using it because the documentation is geektalk. There's no one creating this for the small groups; we are aiming at a slightly different audience.

Susan: Talk about audience and how do we size our market.

Angela: We do not know all of the answers, it's a hard market to size up. 90% of our organizations have a budget under $100,000, all have under $500,000 budget.

Susan: It is doable to do 10,000 organizations in 5 years?

Angela: If we do not have the support we're not going to roll it out. Once we have the knowledge base out then we can begin to scale up with stronger strategic focus.

Anita: You fundraise to provide a service that masks the underlying organizations; the organizations are not fundraising the cost of a fully sustainable. I would encourage you to charge a bit to pass that cost through to these other groups.

Dave: Small nonprofits have a hard time getting tech money and it's very hard to get that grant money. It seems logical to organize that funding in a centralized space, kind of like a technology grant...that seems logical to some extent.

Angela: Our board really want to keep this free, part of our sustainability plan will look at premium services. If these organizations do not have something they will have nothing.

Audience: If a 1/3rd of your budget was to be paid for by the current user base, would it be a material amount of money?

Angela: The current services are not something to pay for; with the toolbox in mind it may be $100 a year to cover costs. Will orgs do it? Many would not pay; we have to convince them that these tools are useful; many groups do not get the value of these tools at first.

Dave: It may shift our audience entirely and we would be competiting with Civicspace, instead of partnering with them.

Audience: I deal with the same organizations and you cannot charge. You can offer those fundraising tools and take a percentage and you will make money. You can revenue share by offering these tools.

Audience: If your differentiation comes in support why not focus on support and make the tools secondary, put your efforts into support and customization?

Dave: One of the tools we offer is Drupal. We can refer people to SSC and look at Drupal but you won't know how to use it. People who are looking for Drupal consultants are not going to be coming to us for free services.

Susan: What it is that you know about the nonprofit market that's under $500,000 -- what can you do to connect the technology to the mission, rather than brochureware? Is there a readiness piece that you go through?

Angela: We are going super simple and easy. We have toolbox advisors and we want to make sure our ideas are sound.

INTERMISSION: Dialogue on feasibility and determining how to make things work.

Family Farmed

Jim, founder of Familyfarmed.org

Family Farmed is a system to connect local and organic farmers with markets. Our website shows stories that these farmers offer, where consumers and trade buyers can see who is offering what. We also have a bricks and morter operation, an expo, that drew thousands to Chicago where consumers and businesses connect with the organic industry. We establish and connection and trusting relationship with people who are growing the food. We think it's scalable; we're in 7 states and Ontario, Canada now. We have relationships with the best organic companies in America, Whole Foods has been our partner from the beginning. Other markets are interested in creating those relationships. Some of our partners give us money, the Expo lost money in the early years and now generates $75,000; it has become sustainable and every industry needs a trade show, advertisers and partners are interested.

Panel: I'm a big foodie and this seems to have e-commerce written all over it. If I could dial up your website and have everything fedexed or have it picked up at Whole Foods with percentage going to you and farmers that sounds like a great service. Have you played around with that idea, have you run the model?

Jim: We've thought about that model. We launched it with no capital. When we talk with VCs about this idea there's a lot of interest. We're developing a system of certification, working with humane standards, domestic fair trade standards. We don't always know how things are grown or how people treat the animals -- consumers want to go beyond organic for transparency in food.

Anita: Can you talk a little bit about the lessons you've learned in the process?

Jim: Don't get too dependent on foundations. We had big grants in our last work (Sustain) and our money disappeared as cultures shifted. We also do consulting so we're diversifying, looking at multiple streams of earned income revenue. Licensing deals and such will be joint ventures with forprofit so that we're not dependent on donations. If there's opportunities for growth we will have investors.

Susan: Talk about your competition. Variety of labels, certification, buy local...why FamilyFarmed?

Jim: They are collaborators; Food Alliance does a label and they're interested in our model and relationships, we have food relationships that other groups want. For us a lot of this work is colalborating across the field. There are good groups out there and what we're offering with both the website and the expo; many opportunities for partnership as we bring resources to them.

Susan: I don't understand what you're doing that will bring value...you're working with Whole Foods. What is actually happening, a transaction?

Jim: We help connect Whole foods with local products; we're foragers. We connect them with local products. The farmers like us a lot because we're helping Whole Foods find people to give low industry loans. Potential with the show, ecommerce and building certifications. Our work with Whole Foods is more philanthropic. The sourcing work is more about building local food systems; the forprofit side is the ecommerce/expo/licensing/certification system.

Panel: It's funny to me when I go to find restaurants and you see certain brand names on the menu; chocolate or meat that connote to the consumer a concept of quality. It's a hallmark for the restauarant. Have you contemplated an approach where a subbrand of yours could become a way to continue this differentiation?

Jim: We've developed a label for FamilyFarmed with name of farm and place of production.

Audience: Who is your target market, customers or middlemen who sell to customers?

Jim: Both. Consumers use our site and go to see stories of farmers. Trade buyers go to site and meet farmers. Anyone interested in buying local food is our target market. The Chicago show rocks; we couldn't focus on the trade part because we were focused on the consumers. We could focus better but both fit into this model...we can concentrate more on focusing our events.

Audience: Trust. There's a lack of information about our food. What can you do to increase trust and capitalize on it.

Jim: The food stories are an important part of that, we're doing this now. The standards and quantification of value is key.

Panel: Security, community....you need to figure out who your audience is and dig deeper into that beyond the food show element. If you're looking to make social change it's long term; where are they really able to change their behavior and buy differently?

Thanks to Family Farmed.

Innovatorz Media

Jamie Patel and

When you talk to us about Innovatorz assume that we know a little something about you...give us the one minute on the money.

Jamie: We talked to social innovators on whether they would pay for this; they said "yes" if you make it easy for us to produce media and reach the audience then yes, we will pay. If we can bring people to a large audience then yes, we can be sustainable. Sponsorships and product placement is a reveue stream, along with our content library with licensing deals. There are many people looking for this content and there are many opportunities.

On the other end of that spectrum we aim to be 100% sustainable in two years; if any of you have a place to live that would be great. Right now we're developing our model and we're not asking people to pay for it; we have small grants but are mostly volunteer.

Panel: How big is your market?

Jamie: Big!

Why are we all here? Social change; there are many groups pushing that.

How many organizations like TIG are out there that want to share stories to engage people on social change? Many of them.

Susan: Talk to us about the research; who is willing to pay what?

Jamie: The market in real money...to be honest we have a figure that groups are willing to pay in thousands a year. We do not have a number of innovatorz yet; we want to get exposure for our Innovatorz. We're not asking them to pay us right now.

The earned income strategy moving forward is from foundations and different organizations that want us to do this content pull and push for their grantees.

Jamie: Federated media is a great example

Anita: Why are you a nonprofit?

Jamie: We got $25,000 in grant money because I sat down with Kellogg Foundation and he gave us a grant to get started. That's how we started.

Panel: A need; we need groups who understand nonprofit/forprofit media models.

Susan: Who is your audience and how do you get it?

Jamie: There are a lot of valuable innovators and we work with their networks directly. Young people who are inspired and want to change the world is a big audience. But what are we focused on specifically? High net networks and stories that inspire youth.

Anita: How do you access them?

Jamie: Through partnerships with other organizations like Starting Block.

Audience: I'm honestly confused on why you want to incorporate as your own entity vs being under a bigger organization. If you were to get X number of dollars from Y donor what would you do with this? Why not work in partnership with Skoll, etc?

Innovatorz: The real value comes from helping social entrepreneurs developing social content with the technology. We develop those partnerships with high net individuals with distribution channels.

Jamie: What would be spending money on? We've talked about being adopted/acquired, going to Ashoka at the end of the month. We are leveraging everything we can; we see a need and we want it to be filled.

Panel: We see a lot of duplication of efforts; I hear you saying that you're looking to do right, even if your project becomes part of a larger whole.

Audience: It seems you have a package that you can develop and look at in a larger form for organizations. Clarify the value of what you're offering; you're creating a package that allows social innovators to clearly define expectations and succeed. What exactly do you have to offer tehse organizations that isn't already out there?

Innovatorz: The ability to work with them and their grantees to use new rich wet media to tell their story. We help organizations use vlogs and technology to tell their story. We show people how things work and how to use it better.

97% of all philanthropic reporting is TRANSACTIONAL. We want to take this to the next level and get the content out there that is meaningful.