Code, Camera, Action

A psychologist's toddler study group shows that kids are inclined to help -- but less so if that help is rewarded.

Warneken and Tomasello conclude that rewarding children for altruistic behavior causes them to be less likely to be altruistic in the future, and these results certainly seem to be dramatic evidence of that conclusion. I'd only make one point in the toddlers' favor: They had learned to play a game where both they and the experimenter had clear roles. The child helped out, and the experimenter gave him a prize. But halfway through the game, for these kids, the rules changed, and suddenly the experimenter wasn't living up to her part of the bargain. Was it the reward, or the betrayal that caused the child's behavior to change?

via scienceblogs.com

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A month or so after Paul Graham and company started Y Combinator, that visionary mix of venture capital and summer camp, they took the motto “Make Something People Want.”

Graham talks about this in his April essay, Be Good—

Another thing we tell founders is not to worry too much about the business model, at least at first. Not because making money is unimportant, but because it’s so much easier than building something great.

He goes on to argue that the combination of these ideas — making something people want and not worrying too much about making money — is a working description of a charity. And that the intersection of charity and business is a really interesting one for our times. He sees startups acting like charities and wonders, Would charities work as startups?

The rest of the article is well worth reading, so I’ll not spoil it.

But it did get me thinking about the charities I know. While many are still focused on remedying a need (which can be a command economy version of making something people want), there’s a lot of excitement around bringing the market into the nonprofit world. And most now worry about both needs and sustainability.

Both for- and non-profit perspectives require that we give people something.

There’s another thread here, though, about the value of goodness in the for-profit world.Umair Haque, the Harvard Business School economist, writes about the lack of giving and the current banking crisis. Haque says it’s not so much a crisis of confidence as one of strategy.

In finance, nobody knows what bonds are worth precisely because firms strived for so long to conceal information about risk. Traditional competitive advantage dictated this strategy — there was value in “trade secrets” and limiting information about prices and risk. But in contemporary markets, those have proved to be flawed strategies. Haque writes that against a background of cheap, always-on interaction:

[W]e’re both always and everywhere better off not dealing in lemons at all – because what goes around comes around. If I sell you a lemon today, you might hack it, tweak it, remix it, and sell it back to me slightly altered tomorrow.

At our velocity, nobody — the little guy least of all — can afford to be evil.

As Graham points out, we little guys get great benefits from openness and goodness. People want to help. Folks are motivated.

This new ground for firms. The best study of giving and goodness I know is by scholar-writerLewis Hyde. It’s just been re-issued as The Gift: Creativity and the Artist in the Modern World. Hyde looks at gifts and giving in various cultures and finds giving to be essential for productive artists. Graham and Haque argue that it’s good for-profit enterprises, too.

But perhaps giving and markets are not such strangers. After all, firms make “goods” — the origin of that noun brings us right back to making stuff people want.

Let us all get back to making goods.

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A friend’s client wanted to help Ghana. Microlending seemed to be a good way to do it. The client would collect money in the US, and fund small loans to farmers and entrepreneurs in Ghana. The web might even make the first half of this — collecting money and telling the stories of who was helped — easy.

My friend was all set to start writing code. That’s his business, after all.

But did code needed writing? I could think of lots of options for helping Ghana — and finding like-minded people — with sites already on the web.

• Kiva does micro-loans across the globe. They’ve gotten lots of press, and do a pretty good job of getting their projects’ stories back to donors.
• MicroPlace is eBay and Calvert’s entry into microfinance. This is organized like a mutual fund, with on-the-ground folks coordinating investments in a particular country. They are making loans in Ghana now.
• GlobalGiving does vet their projects, but there’s a standard process for that — so it may be that the client’s project could get registered with them, and use their fundraising infrastructure.
• Nabuur organizes volunteers, not loans, and provides a means of helping folks in Africa and Asia. Through Nabuur’s website, an accountant in the US might donate services to a farmer in Ghana. Nabuur has folks in-country vetting projects.

With so many opportunities for donors/lenders already, it would take a really good idea — and super marketing — to bring another microlending system to prominence in the US.

I’m not sure that’s what my friend’s client had in mind.

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