Although DonorsChoose.org is a nonprofit organization, a charitable organization by most any standard, it operates as though it is a business, albeit a highly effective and efficient one. Much like many contemporary businesses, DonorsChoose is structured around a series of interconnected teams. Guided by Charles Best, an executive team of eight members runs DonorsChoose. Other teams include marketing, finance, operations and human capital, partnerships and business development (one such team for the east region, one for the west region, and one for national headquarters), and technology and user experience. In addition, the organization is guided by (1) a board of directors, consisting of over a dozen members from a variety of organizations and career paths, and (2) a national advisory council, consisting of over two dozen members, with varied backgrounds involving substantial responsibility. Just as the members of the board of directors and national advisory council come from all walks of life, so do the members of the various DonorsChoose management teams and other staffers come from varied backgrounds and they bring varied skills, experiences, and talents to the organization. The common bond among them all, however, is a strong interest in and commitment to the effective public education of America’s children. 

  

As a nonprofit, acting much like a well-managed business seeking to achieve optimal effectiveness and efficiency, DonorsChoose must capitalize on the opportunities that exist in the marketplace: only this is the marketplace of charitable giving. In this marketplace, DonorsChoose is taking advantage of two major opportunities: (1) the social connectedness of individuals, particularly younger people; and (2) the philanthropic and social responsibility inclinations of businesses and business people.

  

    Opportunities Rooted in Social Connectedness  

  

The social connectedness of people in contemporary society is facilitated and strengthened by social media technology.  “People’s interactions through Web sites, cell phones, chat rooms, personal digital assistants, iPods, and other gadgets and gizmos have transformed society from the information age to the connected age. These digital tools . . . are important not for their wizardry but because they’re inexpensive, easy to use, and allow individuals and small groups to bring about big changes.”

  

“The greatest challenge for nonprofit leaders in the connected age is adopting a new mind-set for social change. Power is shifting from institutions to individuals throughout society. . . . Successful connected-age organizations are those that facilitate broad networks of social activists, not necessarily organizations with the biggest membership lists or the most money in their coffers.” Perhaps this helps explain the growing popularity among younger people of online charitable organizations like DonorsChoose. Their social consciousness, coupled with their social networking proclivities and their technological savvy, provides a significant but challenging opportunity for charities that operate online.

  

All organizations—nonprofit and for-profit—will need to change to capitalize on these opportunities. Indeed “[y]oung people aren’t going to change; they’re going to bring their passions and connectedness to their future organizational lives. Nonprofit organizations need to change to accommodate these young people’s work ways and make the most of the connected age.” Vinod Khosla, a well-known venture capitalist, places DonorsChoose alongside the most innovative for-profit technology companies in that it leverages the connectivity of the Internet. Eileen White, managing director of charitable services at Goldman Sachs, states: “[T]he Web is proving invaluable in connecting people in need with those who can give. ‘It’s a whole new way of giving.’”

  

    Opportunities Rooted in Philanthropic and Socially Responsible Businesses and Business People  

  

In the first few years of its life, DonorsChoose focused on soliciting donations from individual contributors. In the mid-2000s, the nonprofit began focusing some of its attention on how DonorsChoose could effectively partner with business leaders and business organizations to make further inroads into funding public school teachers’ educational projects. In March 2008, Fortune magazine reported that DonorsChoose “went live in all 50 states, thanks to a $14 million donation that included money from eBay founder Pierre Omidyar and Yahoo co-founder David Filo. . . . [Venture capitalist] Vinod Khosla also contributed and helped structure the funding to be less restrictive than a typical grant.”                                                                                       

  

Additional business support for DonorsChoose initiatives have come from John Langan and Judy Nadell, the founders of Townsend Press. Langan and Nadell are committed to the belief that education can be improved when children have access to books to which they can relate. They gave DonorsChoose a $1 million grant to help improve childhood literacy. Charles Best says, “We’re using their grant to fuel what we call citizen philanthropy—getting that $20 donor to fund a project that would otherwise seem out of your reach because of a philanthropic discount from a bigger donor.”                                                                                         

  

To further stimulate individual donor interest in funding educational projects, DonorsChoose developed a variety of charitable initiatives in conjunction with various businesses. This enabled DonorsChoose to connect with the customers of those organizations. For instance, some banks are presenting DonorsChoose gift certificates to their high net-worth customers as a simple ‘thank you’ for their business; the gift certificates allow the banks’ customers to target their donations to a project or projects of their own choosing. Charles Best, the DonorsChoose CEO, observes that “it’s often difficult to provide wealthy clients with gifts they view as significant. A lot of banks struggle with what to give their high-net-worth clients, [what to give] to the person . . . [who] has everything. . . . But this is something that people see as being meaningful, even for a bajillionaire.” According to Best, “[a] growing number of banks are using DonorsChoose to give a unique gift to customers, suppliers and employees” and they have become a significant component of the nonprofit’s strategy.                                                                              

  

In another partnering initiative, eBay presented 19,900 DonorsChoose gift certificates to users of its Giving Works program; the average value of the certificates was 65 dollars. Interestingly, Charles Best compares DonorsChoose “to the eBay model where teachers are the sellers and donors are the buyers.” Google “gave its AdSense clients $100 gift cards for DonorsChoose. org, which allowed them to choose where to make their donations.” Yahoo gave DonorsChoose gift certificates to their employees as well as advertisers. As a holiday gift, 12,000 Yahoo employees received $100 gift certificates to redeem, and 1,500 advertising clients received $70,000 worth of DonorsChoose gift certificates.                                                                                       

  

These businesses’ philanthropic initiatives provide a useful lesson for other organizations. Researchers Michael Norton and Elizabeth Dunn, respectively of the Harvard Business School and the University of British Columbia, suggest that many companies could alter their own in-house donation programs to encourage generosity and give employees an option regarding how philanthropic funds are allocated. Their reasoning is there will be a positive impact on employees as they become aware that spending money on others will make them feel better.                                                                                        

  

    The “Bottom Line” for DonorsChoose  

  

All of the initiatives undertaken by DonorsChoose are having a substantial collective impact on public education in America. DonorsChoose keeps extremely close tabs on the impact of its activities. Impact measures are updated on a daily basis. On May 28, 2011, as this case is being written, Donors Choose has raised $83,988,155, which has funded 204,203 projects at 45,984 schools, thereby helping 4,975,788 students. The donations supported the acquisition of books (26 percent of funded resources), technology (25 percent), classroom supplies (38 percent), field trips and class visitors (1 percent), and other resources (9 percent). As of May 28, 2011, project requests were posted by 179,462 teachers; and 63 percent of the projects received full funding. Perhaps the ultimate measure of the organization’s impact on public education in America is this: 94 percent of the teachers say the funded projects increased their effectiveness in the classroom.                                                                                 

  

With a doubt, Donors Choose has made substantive progress in fulfilling its mission of “engag[ing] the public in public schools by giving people a simple, accountable and personal way to address educational inequity” and its vision of “a nation where children in every community have the tools and experiences needed for an excellent education.” DonorsChoose made significant progress in fulfilling its mission and vision, and the nonprofit “has become something of a template for charitable giving in education. As far away as Hong Kong, entrepreneurs have developed a Chinese version, at edexchange. com, to connect Chinese teachers with donors.”                                                                                        

  

Given how DonorsChoose.org has helped to transform the educational landscape through charitable funding in the past decade, one has to wonder what the next decade might bring?                                                                                                

  

    Discussion Questions  

  

1. DonorsChoose is structured like many contemporary business organizations. Do you think this structural similarity is useful for a charity, or should charities not emulate the organizational structures of for-profit organizations? Explain your answer.                                                                                               

  

2. Based upon what might be inferred from the organizational structure of DonorsChoose, and what you have learned about the organization from the DonorsChoose (A), (B), and (C) cases earlier in the text, how would you describe the organization’s culture?                                                                                              

  

3. Referring to your responses to questions 1 and 2, how does the DonorsChoose structure and culture position it to capitalize on the social connectedness trend?                                                                                                

  

4. Is the development of various collaborative initiatives with various businesses a wise strategic move for DonorsChoose? Do these collaborative initiatives fit with the structure and culture of DonorsChoose? Explain your answer.                                                                                              

  

5. Could you envision your career involving, at least for a reasonable period of time, work for a nonprofit organization? How has the knowledge you have gained about DonorsChoose affected your thinking about working for a nonprofit?                                                                                               

  

6. Go to the DonorsChoose Web site and look for the current information regarding the nonprofit’s impact on American public education. What conclusion do you draw by comparing the current data to that of May 28, 2011?                                                                                               

  

7. Will DonorsChoose be able to continue to adapt and develop to make even more progress in fulfilling its mission and vision? Explain your answer.

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Given how DonorsChooseorg has helped to transform the educational landscape through charitable funding in the past decade one has to wonder what the next decade might bring DonorsChooseorg has had a p... View the full answer