What's So Special About DonorsChoose.org?

So Fast Company has selected DonorsChoose.org as one of its most innovative companies and on top of that, they decided to put DonorsChoose founder Charles Best on the cover of the magazine and write a longer article about them as well. It’s pretty unusual that a non-profit would be selected for such a list and highlighted in this way. But then again, DonorsChoose is a pretty unusual non-profit. I’ve been fortunate to have been involved with DonorsChoose for the past seven or eight years and have been on their board for the past three or four. So I thought I’d list some of the things that DonorsChoose has done to illustrate the point.

– DonorsChoose launched a crowdfunding service and business model in 2000, fourteen years ago. To my knowledge they were the first crowdfunding service launched on the Internet, long before the leaders of the category like Kickstarter, Lending Club, and other emerged.

– DonorsChoose has built a network of almost 200,000 teachers, over 10mm students, and over 1mm funders. That network has brought $227mm of funding into public school classrooms but it is being used for a lot more. Entrepreneurs are using it to get things like 3D printers, underwater robots, and computer science classes into schools. DonorsChoose has become a distribution network in addition to a funding network.

– DonorsChoose has open data sets and an API that allow anyone to analyze what resources teachers and students are seeking. Increasingly policy makers are accessing this data to determine what resources are most needed in the public schools.

– DonorsChoose is a sustainable non-profit. They apply a take rate like every other commercial marketplace (it is currently about 13% and donors can, but usually don’t, opt out). This revenue scales as giving scales and has been covering the costs of the operating the business for a number of years now. Any profits they make above covering their costs are given back into the marketplace, usually in the form of match offers.

– DonorsChoose looks like, acts like, and is a startup. When I walk into the DonorsChoose office, it feels just like walking into the Etsy, Kickstarter, or Twitter office. People are active, animated, and energetic. They have a large software and product team. They could easily fit into the USV portfolio and if they did, they would be one of our star companies.

Networks are replacing hierachies as we enter the information era. And in the world of non-profits, the DonorsChoose network can and should be a model of how you can build an organization with huge impact using a networked model.

Another node on the DonorsChoose network are corporations and their marketing and corporate social responsibility teams. Corporations and their brands have a place on DonorsChoose as well. They provide match and challenge funding in all sorts of interesting and innovative ways. If you are involved in these kinds of programs and want to work with DonorsChoose, you can go here and learn more and contact them.

It’s very satisfying to see Charles and DonorsChoose get this kind of recognition. They are one of the most innovative organizations I work with. And I work in the innovation business. Congratulations DonorsChoose.


Comments (Archived):

  1. William Mougayar

    They do grow on you after you use them because they make the connection with the recipients so real & touching.Will they expand that model globally or into other segments?

    1. Jeremy Berman

      We created Givingoods.com to expand this model to nonprofits. We just wrapped up our first campaign to help Stop Soldier Suicide (SSS) stock their office for their first employee. We’re now rebuilding the platform to scale. Check out the SSS campaign here: https://campaigns.givingood

  2. awaldstein

    I’ve been a supporter and making donations every since I heard about them here.I’ve shared what they do with the numerous teachers in my family as a model of how it can be done.Just good stuff!

  3. Brandon Burns

    I’ve always been interested in the profitable non-profit. I wonder what other good examples are…

  4. David Semeria

    On the subject of networks over hierarchies, I found this great video in which a nuclear submarine captain, David Marquet, explains how he decided to stop giving orders and let the men run the sub by themselves. It became the best performing boat in the fleet.On the back of the video, I also downloaded his book and am really enjoying it.http://www.youtube.com/watc

    1. awaldstein

      David–shared this from your tweet over the weekend widely.Marketer that I am it spurred some thinking about how micro brands in a network not hierarchical marketplace take on a new importance as well.

      1. David Semeria

        I’m just amazed the Navy let him iterate in the marketplace….

        1. awaldstein

          Yup–waiting for our local military expert to weigh in here,

          1. pointsnfigures

            I am not a military expert, but have read a lot of history about the US military. I am on the board of trustees at the NationalWW2Museum.org. I was at the Air Force Academy for a short time as well. From all that I gather, the US has centralized planning for operations (battle) but then gives jr officers a lot of autonomy on the ground to make decisions and change in the heat of operations. For example, at D-Day, when things didn’t go according to plan, it was the individuals on the beach that figured out how to make things work. My friend that was in the “back half of the first wave” saw the first guys get annihilated. He told the Navy man driving their boat not to put the ramp down. He then told all of his men they were going over the side, and to not stop running until they hit the first wall. They were planning inside the boat, not waiting and watching as you see in movies. Once on the beach, it was chaos. Every man under his command survived the first day and made it to the wall. Four days later, he received the Medal of Honor in Goville, France.Conversely, the German army was centrally planned, and controlled. Officers couldn’t make adjustments on the ground. I saw a story where Americans were shooting sulfur rounds at a disabled German tiger tank. The soldiers inside knew that they were toast, but because the standing order was you couldn’t get out of the tank until it was on fire, they didn’t move. They waited, finally the tank burst into flames and they got out.In spite of all the fun anyone can poke at the inefficiencies in the US military (and there are a bunch), it’s the best run in the world.Networks always beat hierarchies.

          2. JLM

            .In Viet Nam, a patrol would lose all of its leadership and the draftee senior class president would bring them home.American leadership is different than the rest of the world. It is pervasive.Our battle plans v the Russians in the 1970s were based upon decapitating unit leadership. Look for the BMP with all the antennas and kill it.Russian units typically spoke a number of different languages with the officers, noncoms and men from different regions to preclude their attempting a mutiny.A Russian unit with no leadership would just sit there.JLM.

          3. pointsnfigures

            Interesting you say that. My friend was in “communications” in Vietnam. He thought it was safe. Little did he know the first guy to get shot at was the radioman!

          4. JLM

            .Infantry Second Lieutenants, Artillery forward observers, RTOs and machine gunners — short life expectancies indeed.JLM .

          5. JLM

            .Normandy is an interesting battle for all of the reasons you have enunciated.Had Hitler not demanded personal control of regional armor forces — very substantial armored forces — and had they attacked on D Day, the landings might have been pushed into the sea. It took days for the Allies to get armor ashore.This central control prevented local German commanders from fighting the real fight. The German unit commanders were very, very good. They were all vets who had fought in other theaters while many of the Allied units were cherries. Not all, but many.D Day was arguably won by Lieutenants and Captains who failing to receive further orders just continued east and killed Germans.Within a week, the Allies were so well lodged that it would have taken a brilliant battle to dislodge them but only then did units at the Division level begin to conduct operations with that level of leadership directing things.The Airborne units were totally leaderless above the company level and yet they accomplished their objectives of preventing the Germans from reinforcing the forces opposing the landings. Each man knew his job was to kill Germans. They also coalesced into provisional units and developed their own chain of command. If you were the ranking officer, you were in charge by force of nature.This adherence to the chain of command in the face of losses is a very strong point of the American military. It is automatic.JLM.

          6. pointsnfigures

            Hitler’s hubris, and fascism lost him the war. If he would have knocked the Allies back into the sea, we would have had to refocus on Italy. Hitler was going to lose to the Russians anyway. D-Day preserved democracy in Western Europe. The joke is that everyone would be speaking German if it weren’t for the Allies-but the truth is they would be speaking Russian.

          7. LE

            The soldiers inside knew that they were toast, but because the standing order was you couldn’t get out of the tank until it was on fire, they didn’t move.Well to counter the idea that “change when things don’t go according to plan” what about the Seal team story where they couldn’t kill the goat herders in order to protect themselves because they were apparently civilians? [1] And even though they knew they were going to rat them out? So that is a hard and fast rule and I”m sure there are a ton of those, right? One is for sure “follow orders” it’s not “follow orders but hey if you need to adjust then adjust”.[1] Remembering Lt. Calley in Vietnam probably set that into play.

          8. JLM

            .The goat herder problem is one that is taught at IOBC (Infantry Officer Basic Course) since the Viet Nam era.The approved solution is to scrub the mission, call for extraction. Tie up all but one goatherder.Take that one goatherder with you to the extraction point. Free him at the time of extraction.I was in plenty of classes wherein they killed the goatherders and debated the ethics thereafter.Calley was an abomination and should have been executed. He was a kid with no morality and the chain of command should not have allowed that issue to be unresolved.When I was at Benning for schools, Calley was on house arrest in officer’s quarters.JLM.

        2. JLM

          .The military is well known for simply changing leadership, getting out of the way and expecting a miracle. It often happens.Two units I commanded in the military, my predecessor had been relieved. One I was the third guy to get a crack at fixing it.In both instances, I was “asked” whether I was up to the challenge. Well, asked like a Major General “asks”.My development was purely incremental — I was ready for the challenge because I had been brought along in my training.In both instances, I relieved key personnel (1st Sgt, Training Sgt, Plt Sgts) and the new guys rose to the bait.Both units made perfect scores on their ARTEP within 9 months. I knew we were making progess as I could see the training taking root but I was completely surprised at the level of excellence. I did not see it because I was too damn close to it.This is a type of leadership responsibility that has almost no direct comparison in civilian life and why young officers are such an asset for American business — not necessarily startups but business in general.BTW, the Good Life Project has a video on this guy. Most impressive.JLM.

          1. David Semeria

            Just seen his Good Life interview. That was excellent, thanks.Loved the final story of when the kid told him he was wrong (which he was). He went up to the kid and thanked him — quality.

    2. JLM

      .It is a great story. The boat had been the WORST sub in the fleet and became the BEST sub in the fleet. This is no row boat, it was a Boomer.This is a perfect example of the ability of leadership to transform an enterprise.JLM.

  5. jason wright

    i feel i’ve just been neuro linguistically programmed :-)that name is gonna be rattling around my head for the rest of the day, whether i like it or not.your posts need a mental well-being ratings certification system.

  6. Robert Heiblim

    Yes, this is a great effort. It was terrific to see MakerBot give this out at the LIT dinner at CES. Many worthwhile projects by teachers here.

  7. JimHirshfield

    I read the headline and immediately thought of the Elvis Costello song:”What’s So Funny About Peace, Love, & Understanding” Glad to start my day with that sentiment and your “feel good” story.

    1. JamesHRH

      Love that song.

  8. JamesHRH

    I only have one beef with this, but it is important.’networks are replacing hierarchies.’This is:a) completely falseb) a classic mistake from people inside a wave of innovationc) includes at least a dash of hubrisd) all of the aboveThe answer, obviously, is d).If you took the hierarchies away, there would be no classrooms or teachers.The 227M distributed via DonorsChoose, in its lifetime, is 2% of the annual education spend in the USA – http://www.usgovernmentspen…I do not think that networks are replacing hierarchies, yet.I am not sure that they will, ever, yet.DonorChoose is terrific, obv. Great story.

    1. William Mougayar

      2% is a great start! In 2000 Internet advertising was maybe 2% of total Ads. Today, it’s 20%.

      1. JamesHRH

        Rate of growth today?

        1. William Mougayar

          For Internet advertising? Easily 20%+.

          1. JamesHRH

            This may be the exception to my rule!We will see how the growth rate goes in the next 10.

    2. pointsnfigures

      Networks usually beat centralized hierarchies. Markets are better than individuals. Seen it in action, and felt it in my pocketbook.

      1. JamesHRH

        Does Rad Vlad Putin run a network or a hierarchy?

        1. JLM

          .An evil empire?JLM.

          1. pointsnfigures

            autocratic centrally planned hierarchy

          2. JamesHRH

            You missed ‘highly effective for his purposes’.

          3. pointsnfigures

            streetwiseprofessor.com has some good stuff all the time on Russia. He is an expert. Putin isn’t a lot different from Brehznev

          4. JamesHRH

            is that an upgrade form Stalin?My point is that hierarchies aren’t going anywhere. They have a lot of ‘traction’.Anyone who was not sleeping in HS history class knows this is true.

          5. LE

            See my reply to JLM as to why that may be the case.

          6. JamesHRH

            Easy there Gipper!It’s at least evil lite compared to 100 yrs ago.I agree in spirit however. The tortured Russian psyche is quite a thing.

          7. JLM

            .I doubt there is one bit of mischief that Russia was engaged in 100 years ago that they are not undertaking today.Putin was a KGB guy — he will never stop being a KGB guy.He has personally looted Russia and is reputed to have billions stashed away.One of the gravest errors we make is that because our government remakes itself every 4 years, we think that others follow a similar cycle. That is not true.They just keep getting more concentrated in their evil undertakings.How long has Putin been in power with the presidency and premiership?JLM.

          8. LE

            You say that as if it would be possible to have a system like ours in Russia and it would all just work. [1]But it wouldn’t work because the Russians are the type of people they are based on their history and upbringing. Like the brainwashing over time. Same as you and I based on the way we were raised.I’m not a history person (so feel free to explain and correct me) but I thought that is the reason a Putin is in control is because what happened after Gorbachev just simply didn’t work without the way the Russians are used to operating. In terms of needed the strong type leader that Putin is (and the corruption and all of that).Also what ever Putin has stashed away probably pales to spending 51 billion on the Olympics (if that is true). That a huge amount of money and it’s far from clear that bet will pay off.[1] Look at what is happening in Egypt since that government fell? Was kinda better (for us) before with Hosni and arguably was also better for many people there as well. To just assume (not saying you are doing this but people) that you can just have our type of “fair” system with a group of people like that may be a mistake (once again I’m open to correction on all of this.)

          9. JLM

            .Well, of course, the very best form of government would be an enlightened dictatorship with ME as the dictator. I would be very fair and even handed and would be a terrific job creator.One of the things that has failed us is our notion that a 200 year old +++ democracy can be replicated in a couple of years — witness Iraq and A’stan as classic examples of the failure of that logic.BG McMaster, JAG learned that the hard way. Created courts, appellate courts, supreme court without realizing that the Afghanis would simply kill the prosecutors, the witnesses, the judges.JLM.

          10. JamesHRH

            OK, maybe ‘all new Russian totalitarianism with 10% less evil than the original’?

    3. ShanaC

      that is sad. 227 m is only 2% of education spending. That seems, I dunno, low

    4. Cam MacRae

      A pedant might also point out that a hierarchy is a network with specific topological features.

  9. Shaun Dakin

    do you want to know why I love it? I donated last year to a classroom in the District of Columbia. And a few months later I received a folder or envelope of letters from the children in the classroom thanking me for my donation. Not only did they send me these wonderful letters, they also gave me a direct link back to the classroom where I could see photographs of the children using some of the donated materials. I was simply blown away by this closing of the loop. This is the future of giving.

    1. David Semeria

      Same here, the letters were very touching.

    2. fredwilson

      yup. that’s what hooked me back seven or eight years ago too.

  10. Anthony Serina

    The giving landscape is going through a radical change right now. There are non-profits, social enterprises (usually categorized as a b corp), and direct individual giving. Non-profits have struggled INMO because they have unsustainable models by having to spend so much time fundraising, inability to pay professionals, and being discouraged from taking risk. The landscape in giving I believe is being changed by the likes of DonarsChoose that are run like startups. I believe though some of the greatest future giving ventures will be social enterprises because they have fiduciary responsibilities to investors, are encouraged to try new things, can pay and provide equity, and have the most mission based culture built into their DNA.

  11. William Mougayar

    I’m going to take a shot at defending this claim “Networks are replacing hierarchies as we enter the information era.” People are mis-interpreting it, because of the word “replacing”.Maybe it’s a long shot to say “replacing” now. But Networks are emerging in parallel to existing systems. They may not be replacing them, but they are growing alongside these incumbents, and gradually taking a bigger share, such they will become more dominant over time. Networks are emerging in new areas that didn’t exist before.So, Networks are making hierarchies less relevant, as we enter the information era.

    1. pointsnfigures

      Some businesses need to centrally plan some operations. They are more efficient. Mrs. Field’s Cookies is an example. However, Ritz Carlton is different. Even maids have the autonomy to make decisions to satisfy customers.

      1. William Mougayar

        yes, in practical reality you need some centralization to manage people, but the ratio of central vs. decentral is changing in favor of flatter and flatter organizations, no?

        1. pointsnfigures

          100% agree. A lot depends on your industry and the business model that you use to attack and exploit it.

      2. LE

        Even maids have the autonomy to make decisions to satisfy customers.Well what is the scope of decisions that a maid can exactly make though? Give you more towels? Clean your room first? Extra soap? She can’t give you a free room night (right?).I was just at Starbucks this am. The other day the bagel they gave me was stale. I am a regular they all know me (it actually gets annoying). Anyway I tell the barista that I want to be comped for the bagel because the one the other day was stale. (The cost is $1). He say “I don’t know if I can do that I have to get approval”. (He knew me but maybe had been there 2 months.) So he asked another barrista and she says “sure”.Otoh I was at the deli yesterday and made a comment about the lox and the deli guy (who knows me) didn’t charge me (I had my money out to pay and made a casual comment not even really a complaint) (was about $9 worth of lox). Because there are no “rigid” controls at the deli (and that is why the lox was bad they guy the day before didn’t know how to cut it). (They handle money and then do food I freaked the other day and told the guy to put gloves on. Then the owner steps in and does the exact same thing (apple from tree).So while it’s nice to empower people the bottom line is if you empower them what is the downside of doing that vs. the upside.

    2. panterosa,

      networks pushing flow in the other direction. if flow needs to go both ways, then networks are a way of achieving this balance no? and if so, aren’t we back to the idea of “the conversation” as it is rendered internally as a way to iterate externally?

    3. Elia Freedman

      Displacing instead of replacing?

      1. William Mougayar

        I like “Displacing”! Maybe Fred will give it a Yessss 🙂

        1. Elia Freedman

          Ha! Haven’t had one of those in a long time. 🙂

        2. ShanaC


      2. Donna Brewington White

        That’s good.

    4. JamesHRH


  12. Charles Best

    Fred, thank you so much for this incredible post. We will work our tails off to deserve the Fast Company endorsement and your kind words. I hope the AVC community feels pride of ownership in our making this list, as y’all got behind DonorsChoose.org back in the day and have directly helped 53,486 students through Fred’s campaigns. Again, thank you.

    1. obscurelyfamous

      This comment was stuck pending in Disqus for some reason. We went to go dig it out and will take a look at why that happened. Sorry about that @CharlesDB:disqus.Thanks for what you do!

    2. Donna Brewington White

      You already do deserve the accolades, Charles. But my guess is that the same vision, commitment and drive that got you this far will continue to propel you forward.

  13. pointsnfigures

    Ironically Prof John Cochrane blogged about teaching a MOOC today. Here is a link to his blog: johncochrane.blogspot.com-love what he said about community and networks at the end. Ties in with Fred’s post.

  14. dblockdotorg

    Great post. There’re a lot of hard-working people at DC that deserve recognition.You’ve mispelled hierachies, missing an “r”, hierarchies 🙂

  15. LE

    When I walk into the DonorsChoose office, it feels just like walking into the Etsy, Kickstarter, or Twitter office. People are active, animated, and energetic”active, animated, and energetic”I’ve always wondered how long things like this can last before people end up getting married, have families, and then possibly distressed babies (or just kids and ball games to go to).While I don’t know that General Motors was ever full of “active, animated, and energetic” people (it may have been) at a certain point the workforce gets a bit static and moves on to other parts of life as they mature and their priorities change.

    1. Matt Zagaja

      I think it depends on the job and type of person. There are numerous examples of successful people that have fulfilling family lives as well. I have some friends who seem to pretty much disappear once they get hitched or are in a relationship, while others don’t change at all.

  16. Elia Freedman

    Network versus hierarchy: this raise a number of questions, in my mind.How far can we push this? Can all systems and software be network-driven instead of hierarchical? What about hardware? Is the usage network or the software itself? What does network-driven software look like and can it be done for non-open source solutions? Does a focus on the network give that company an advantage over the hierarchically-oriented company? Are there places where hierarchy still wins? Can systems be both at the same time and, if so, how does an organization decide how much of each and when?

  17. Matt A. Myers

    “- DonorsChoose has open data sets and an API that allow anyone to analyze what resources teachers and students are seeking. Increasingly policy makers are accessing this data to determine what resources are most needed in the public schools.”This is immensely valuable data. What government agencies are using it, if any?

  18. ShanaC

    What I love about it – it is both hyperlocal and (or at least could be) global. I can donate into my community while also engaging in others – and that’s pretty cool in my book