Program Design – Matching Grants vs. Voting Platforms

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The discussion about entering contests as a strategic decision was one of the most interesting aspects of the analysis from the Case Foundation’s second America’s Giving Challenge (Full disclosure: Zoetica is performing this analysis). In particular, Students for a Free Tibet carefully vetted the contest opportunity using a series of guidelines to determine impact – positive and negative — on the 501c3. It should be noted that nonprofits see the increasing tax corporate funded contests have created on both the causes and their networks. This creates a programatic challenge for cause marketing design (image by jblyberg).

In essence, when considering how to interest customers and stakeholders, corporations need to invest more time into design. A crowdsourced voting platform may still have value, but now after several waves of contests, programs need to be designed so that more of a win-win occurs. A simple vote-a-thon for a purse is unlikely to create more than a marketing splash, and could invoke serious criticism.

One way to cricumnavigate this issue is to create a matching grants program that encourages more giving and/or activity. Matching grants provide incentive so that regardless of overall performance, votes and activity from consumers create reward. The customer or employee feels that their action mattered, the non-profit benefits, and the overall effect of the campaign is further engagement and loyalty.

Consider Intel’s Involved Program, a matching grant program seeking to motivate Intel employees globally to engage in outreach and volunteerism. In 2009, 38 percent of Intel employees donated 989,681 hours of service in 2009, and the Intel Foundation provided $6.8 million in matching grants to 4,500 schools and nonprofits.

Contests don’t necessarily need matching grants for them to achieve a win-win status. For example, the Sunlight Foundation’s recent Design for America contest wanted to inspire more visualization of open government data. Contest prizes were use to facilitate that, but arguably any design — win or lose — was an effort that helped achieve a theory of change towards better government. The contest did opt to judge by experts rather than voting.

Voting Contests

Voting contests without matching grants have additional weaknesses, too. If a contest is completely crowd driven, it risks becoming a popularity effort rewarding organizations for their ability to successfully galvanize their networks. This doesn’t necessarily mean that the best organization for change will be selected. This has been the largest criticism of Pepsi Refresh to date.

Pepsi’s Bonin Bough has countered critics, “We’re betting on the American people (never a bad bet) to submit and vote on ideas that will really make a difference in their communities. That’s why we’re working with GOOD and Global Giving, and that’s why we’ve conducted extensive outreach with the nonprofit community: we want to make sure that the grants that Pepsi Refresh gives will go to ideas that can truly make a difference. ”

Vetting contest winners or even selecting nonprofits prior to contests allows a program to circumnavigate these criticims. However, in today’s modern era of social media selecting charities for the crowd requires a great deal of transparency. Chase found this out during its $5 million Community Giving Contest when it failed to publish a leaderboard, and reasons why several top vote-getters were not in the top 100. These charities were disqualified for undisclosed reasons.

Transparency into the decision making/vetting process is critical. The more open a cause marketing effort can be the better. When people invest a vote or a small donation or volunteer time, they feel they have invested and become a stakeholder in the contest. They want to see outcomes, and understand why they happened.

Further, the use of qualified third party experts can help with vetting charities, lend credibility, and circumnavigate criticism. It’s important to make their decisions open, too, and allow people to understand the criteria for selection in as public a manner as possible.

New Contests via Technology

New technology development is allowing for hybrid variations of contests. For example, the Humanity Calls/eBay tournament for environmental nonprofits, created a $50,000+ giving tournament with more than 30 of the 100 plus competitors walking aways as winners.

Another organization, X Prize works to create uniquely tailored contests to foster innovation and generate change to benefit humanity. Prize development typically takes 8-14 months for each potential competition, concluding with a final report with a plan of action for donors and category sponsors. The creative process includes a series of sessions between leading experts resulting in ideas that are presented to the X PRIZE Foundation Board of Trustees and potential purse sponsors.

Currently, the foundation is offering up millions of dollars in prize money for the first teams to sequence 100 genomes in 10 days (the $10 million Archon X Prize); to send a robot to the moon, travel 500 meters and transmit video, data and images back to Earth (the $30 million Google Lunar X Prize); and to produce green, production-ready cars capable of exceeding 100 miles per gallon or its energy equivalent (the $10 million Progressive Automotive X Prize).

It’s clear that contests will continue, whether that’s a matching grant program like Case’s America’s Giving Challenge to crowdsourced voting giving affairs and innovation drivers. The key for companies and their partners is executing on program design best practices to create the win-win. Those include going beyond marketing measurements to include transparency and smart reporting, clear benefits for a significant portion of participants (matching grants?), a measurable theory of change, as well as the use of subject matter experts.

Winning Online Competitions: A Coalition of the Giving

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Zoetica has decided not to counsel potential clients on how to win contests like Pepsi Refresh, but many of you are asking for tips. That’s why when the opportunity came up to publish this guest post by Dan Morrison, CEO of Citizen Effect, I said yes. Hopefully, some folks will find it useful.

Philanthropy competitions are the new fad and mode for giving away millions of dollars to innovative organizations trying to save the world. Last year the Chase Giving Challenge gave away $5 million to 100 nonprofits and this year Pepsi allocated $20 million of its Super Bowl ad budget to launch its Pepsi Refresh Project that is giving away a total of $1.2 million a month to innovative ideas that will save the world.

While most of you have never heard of Scott Beale and Atlas Corp. you need to for two reasons. Atlas Corp is creating a new spin on the Peace Corp that will benefit your organization, and Scott is kicking your butts in these online giving competitions.

In the last 2 years, Scott and Atlas Corp have won $325,000 from online competitions, including $125,000 from the Chase Giving Challenge. And he just did it again by winning one of the ten $50,000 prizes from the Pepsi Refresh Project. This is impressive. But it is borderline unbelievable when you consider Atlas Corp’s 2009 budget was $400.000, they only have 1,700 friends on Facebook, 1,215 followers on Twitter, and an email list of about 12,000 people.

So how did they do it? Scott’s plan to win the Pepsi contest was ingenious and will likely have Chase, Pepsi and other online contests rethinking their rules in the future. Introducing the “Coalition of the Giving.”

The recipe for forming the Coalition of the Giving is simple: part good-hearted collaboration, part reality-TV show Survivor, and part persistence (or spam, depending on your threshold for receiving emails, Facebook updates and Tweets).

The Pepsi Refresh Project included hundreds of ideas from all over the country and Scott knew he would need more than Atlas Corp supporters to win. So how could Scott get people to vote for Atlas Corp that had never heard of them before, much less care about their mission?

Easy, ask another organization competing in the Pepsi Refresh Project to market Atlas Corp to their supporters. This was possible because every voter was given ten votes a day, but each voter could only vote once for a specific organization. That left nine useless votes… unless you could form a coalition and trade votes in a “I’ll vote for you if you vote for me” arrangement.

Scott found six other organizations competing in the contest (two vying for $50K, three for $25K, and one for $250K) and told them that every time he asked someone to vote for Atlas Corp, he would also ask them to vote for everyone in the coalition, as long as they did the same. Here again, Pepsi’s rules worked in Scott’s favor because there were ten prizes of $50,000, so it was not a “winner take all” competition and open to benefiting a collaboration.

Pepsi does not share the number of votes, but let’ assume that 70% of Scott’s supporters still only vote for Atlas Corp. That means that 30% of his supporters will vote for other coalition members. Thirty percent does not seem like a lot but multiply that by six and consider that everyone can vote every day. If Atlas Corp is able to pick up ten voters that vote every day through the coalition, that is 280 votes over the course of the February contest. That may not allow someone to go from worst to first, but it is highly likely that it can move you from a contender to a winner.

The results tell the tale. Six of the seven coalition partners won, that is a combined $225,000 for the coalition.

The strategy was ingenious in part because it was selfish as much it was selfless. Rather than just a “vote for me” play, Atlas Corp adopted a “vote for me and consider these other guys,” play. The better the coalition members did in the standings, the stronger the incentive was to continue with the plan and not defect because if they did, they would be dropped from the coalition and loose all those potential votes.

I am not sure voting contests are the most efficient way to allocate millions of dollars for innovative ideas since they reward innovative voter mobilization strategies rather than innovative projects. But at least in the case of Atlas Corp, both were rewarded, and we all learned a lesson that sometimes collaboration is better than competition. Thank you Scott and best of luck in the next competition, we will be watching.

For more information on Atlas Corp, email Scott Beale at scott@atlascorps.org and learn more about Atlas Corps at www.atlascorps.org. For more information on the author, email Dan Morrison, CEO and Founder of www.CitizenEffect.org, at dan.morrison@CitizenEffect.org.