On December 31, 2018, Mari Kuraishi will step down as president of GlobalGiving, which she co-founded with Dennis Whittle in 2001. Gabe Cohen, GuideStar’s senior director of marketing and communications, sat down to talk with Mari. Today’s post looks at GlobalGiving’s founding and early years. Tomorrow’s post discusses GlobalGiving’s values and the qualities the organization is looking for in its next leader.
Gabe: What is GlobalGiving?
Mari: GlobalGiving is the largest global crowdfunding community, connecting nonprofits, donors, and companies in nearly every country. We help nonprofits from Afghanistan to Zimbabwe (and hundreds of places in between) access the tools, training, and support they need to be more effective and make our world a better place.
Gabe: What was the inspiration to start GlobalGiving?
Mari: It started with both me and Dennis working at the World Bank, which is one of the biggest players in international development—certainly well funded, staffed with some of the most technically expert people in the field—observing a couple of things. One is that there were limits to what could be done to eradicate poverty by working solely with the governments and the World Bank. And many actors in foreign aid, if they don’t work through governments, still have to work with governments. So that’s one observation: not everything can be handled by the public sector.
Two, there were also countries where governments were not as effective as they might be, and therefore the idea of channeling aid through government makes the whole venture even more questionable.
Lastly, we looked at the way aid worked, with money and expertise coming from outside the country. Essentially what that meant was that World Bank staff would design programs and set everything up and handshake at the point of loan, and then the government would take the money. There would be no capacity, or interest, even, on the other end, to really treat the project as a living endeavor that would have to be modified as reality changed.
This probably is the most important part, what pushed us out of the official aid realm and into the bottom-up world. It was a question how do you ensure that the people on the ground who are most effective actually have skin in the game and care to make it work, because the best-laid plans never actually materialize in the way you intend them to. And the only way we can discover that they’re not working and why they’re not working and how they need to be changed is local information. So we needed to find a paradigm that put the choice, control, and initiative in the hands of the people in the communities. And it seemed like the right time to set something up, because it was the beginning of the first dot-com boom.
Gabe: In the first episode of the podcast Start-Up, Alex Bloomberg meets with a venture capitalist, and one of the questions the venture capitalist asks him is “What makes you think you’re uniquely positioned to do what you’re about to do?” What made you and Dennis feel that way?
Mari: Partly because we knew the old system, the status quo, and how you get the best possible outcomes out of the status quo. We knew how to run things through that system, and not that many people were in a position—well, there are a lot of people working at the World bank, obviously, but relative to the whole population—there was a very small number of people who knew how the system worked from the inside.
Two, we had spent two or three years looking at the whole space of international development, because we had been in charge of corporate strategy for the World Bank, so we had a feel for all of the actors in the space, and therefore had a feel for what was missing.
In other ways, we were uniquely unqualified to start up GlobalGiving. Neither of us had any technology background—we couldn’t build anything. We couldn’t build a web page. Neither of us had engaged in sales, neither of us had engaged in marketing—you don’t have to when you work for a quasi-monopoly that has its own source of funding. So, really, in some ways, we had no idea how to do a start-up.
Gabe: Do you feel that luck played a part in the success of GlobalGiving?
Mari: Absolutely. There’s luck—luck in a sort of meta way—in that the fact that we came from the World Bank meant that we’d been paid relatively well up to that point. We started in 2001 at what we thought was a dot-com boom but turned out to be the dot-com bust. Which meant that for a couple of years, there was no funding to be had anywhere. It wasn’t just the seed money drying up, it was foundations were kinda like, “Five percent is dipping down, because the whole economy is going south.” So we were lucky that we could gut it out and not take a salary and just kinda grind down despite the fact that it didn’t look very promising for many years.
Gabe: The typical start-up thing.
Mari: Yeah. So that was luck. And we were lucky that we found the people we did at the times that we did. It could very easily have gone the other way.
Gabe: What were some of those moments? Do you remember any of them where you were kinda 50-50?
Mari: Yeah. We had a financing deal that we put together at the height of the dot-com boom. It was $3 million, to get started. The money was from IFC, the private sector arm of the World Bank. They said, “This looks good. Let’s try it.” And we were about to sign, except the IFC, because of its association with the World Bank, said, “Well, this is all great, your plan sounds great, we’re behind you, but our colleagues at the World Bank asked us to include this clause, which said that we reserve the right to review any partnerships that you enter into.” And that they would have 10 business days to say yes or no. And we looked at that and thought, “We can’t say yes to this. This is insane. If we let them review every single partnership we enter into, we’re never going to be able to get going.” So we turned it down. And when the dot-com bust came to be, I was like, “That was so totally the wrong decision. We should have taken that money.” In retrospect, had we taken that money, we would be a very different entity. And I’m not sure that as a very different entity, we would have survived.
Gabe: That’s fascinating. Why a nonprofit? Did you consider other funding models?
Mari: We did. In fact, we started as a hybrid. We started as a for-profit and a nonprofit together. And when you have a hybrid like that, and this was way back, before B corps, before any of the hybrid models had really gotten acceptance, we had to keep them very separate. Separate boards, separate legal entities, separate audits, everything like that. And as a small entity, maintaining the administrative costs of this was quite high. We were hobbling along, though, and managing the governance overhead. But then we got into a situation where we got nonprofit capital coming into the nonprofit, and the nonprofit could have paid the for-profit as a vendor, but that felt too close. So then we said, “Well, the not-for-profit is going to make an investment in the for-profit, so it can share in the upside.” Through that going on for several years, the bulk of the for-profit was owned by the not-for-profit, at which point it didn’t make much sense to maintain the two entities, so we merged them together.
Gabe: When was that? In 2006, 7?
Mari: 2009. Had we started later, I think we might not be a nonprofit.
Gabe: B corp or something like that?
Mari: Something like that. Because over the past 17 years, people’s readiness to give to a non-501(c)(3) has changed dramatically.
Mari: When we started, no one was giving to anything but 501(c)(3)s. It was sort of the Good Housekeeping Seal of Approval. I think it still retains that power, but to a much lesser extent than it did back then.
Gabe: Yeah, and I think there’s a certain class of donors—donors might not even be the right word here—that are understanding the limitations of a 501(c)(3) now, too …
Mari: Yes, exactly.
Gabe: Which his really interesting and I think will continue over the next few years.
Mari Kuraishi is the co-founder and president of GlobalGiving, which helps donors make safe and easy U.S. tax-deductible donations to vetted, locally driven organizations around the world. She also is chair of GuideStar’s board of directors.
Gabe Cohen is GuideStar’s senior director of marketing and communications.