Okay, so the title may be a bit exaggerated — but not by much actually! Many of you know that I’ve been working hard to getting my start-up social venture International Transparency Solutions up and running — a for-profit social enterprise designed to build confidence around global investment in the developing world by providing investors with the due diligence tools and intelligence they need to invest effectively and responsibly! The global perception of corruption in many of these countries is holding massive social and economic potential, and I’m dead-positive that by increasing transparency between investors and investment-seekers can revolutionize the marketplace and they way we engage the developing world.

The social sector has been largely ignored or under-served by the due diligence industry, and internal monitoring and evaluation efforts are often not cost-effective and lack objectivity. But the sector of social investment is rapidly growing in size and significance, and if an independent organization like Transparency Solutions were able to pool M&E and due diligence efforts in developing countries we could definitely leverage economies of scale to provide cost-effective solutions for nonprofits, donors, and other social investors! More affordable and rapid access to reliable information would allow these funding-agents to make sure programs are running smoothly and effectively! And on the recipient-end of things, our services would allow the right people doing honest and accountable work to be recognized and rewarded by the investment community — thus increasing the value on integrity and fundamentally changing the cost-benefit relationship that today often leads to a lot of corruption in some of the poorest and most in-need parts of the world!

This is something that I’ve been working on for years, I’m very passionate about, and desperately want to see in action! I’m confident that just as VeriSign built confidence around the infrastructural security of e-commerce (leading to the e-commerce boom of the 1990s!), Transparency Solutions will do the same for investment in the developing world.

I recently applied for the Echoing Green Fellowship, which would be a HUGE boost in bringing this vision into fruition! The fellowship would include being tapped into one of the best social entrepreneurial networks in the world, as well as $60,000 in seed capital over two years! Well, I was selected to move on to round two! There are 350 of us out of the 1100 total applicants, which means there is still a ways to go! The application deadline for Round 2 is February 8, 2010.

I’m up against some awesome organizations doing amazing things, so I’ll be pouring everything I have into this application over the next couple of weeks. Along the way, I will need your help! As I finish individual parts of the application, I will post them online right here to solicit YOUR feedback! I don’t care if you’ve never heard of a developing country until now, I want to get your thoughts and input!

So here is how you can HELP RIGHT NOW!

1.) Subscribe to the blog via RSS or E-mail so that you can get my updates right away! And tell at least 5-10 other people to do the same!

2.) When I publish a part of the application, tear it apart and tell me what you think! If something is not clear, if something doesn’t sound right, or if something can be worded better, let me know! Leave comments, send me e-mails, call me if you like! (I’ll put my Google Phone Widget in the Contact Me Section!)

3.) Share it with your friends, colleagues, and networks! Put it up on Twitter, Facebook, or on your blog! Get as many people as you can to learn about what I’m trying to do and to give their feedback and thoughts as well!

The more people that are engaged in this, and the more feedback I get will decide whether this application moves on to the next round! Please, please, please help me do this so that we can move toward fundamentally changing the way business is done in the developing world and create a more secure and efficient model for aid and investment!

Thank You!

The following is a cross-post from the Transparency Solutions Blog:

Mario Morino of Venture Philanthropy Partners recently published an article on the growing pressure for transparency in the non-profit sector. He starts off referencing Joel Fleishman’s book, The Foundation: A Great American Secret, where the nonprofit sector’s lack of transparency is cited as its greatest liability.

Morino points to a growing force that is holding institutions accountable and demanding increased transparency:

“A new force has gathered tremendous steam in just the three years since Joel completed his book. It’s far more powerful and enduring than a Senate committee’s gaze, and it’s affecting public, private, and nonprofit sectors alike. It’s the power of tens of millions of networked citizens with creativity and attitude.” (Emphasis added)

Increased availability and usability of information that helps consumers, investors, and donors alike make educated decisions is proving to be a force to be reckoned with. But I don’t see it that way; I see it as a force to be embraced. An opportunity.

One of the reasons I founded Transparency Solutions was to empower nonprofits in the developing world. Our strategy is built on bringing globally recognized credibility to these institutions, and creating a new layer of transparency designed to connect investors with honest, accountable institutions. We’re not a watchdog per se, but rather a resource. We aren’t rooting out corruption, we’re lifting-up transparent and accountable organizations.

I wrote in a blog post yesterday about “Investment Metrics vs. Storytelling” that stories are used to create an “emotional connection” that drives people to volunteer or donate to a nonprofit. I believe what creates an even stronger “emotional connection” is creating the kind of transparency where donors can follow through with their investment and visually see the impact they had (or are having) – a founding principle behind our investment oversight services.

The most successful brands today are those that are developing a “human element” to their brand – often reaching out through social networks like Twitter, Facebook, and corporate blogs. It’s a growing part of core marketing strategy, and illustrates that transparency is not a mere outside force to be reckoned with, but it holds internal significance and opportunity in advancing any organization.

According to GuideStar’s review of non-profit transparency practices, of the 1,800 surveyed organizations only:

• 43% publish their annual reports on their websites
• 13% publish audited financial statements on their website
• 3% posted online their IRS letters of determination to prove their 501(3)c status

Non-profit organizations not investing in transparency and accountability are quickly going to find themselves being passed up by those that are. With thousands of organizations chasing after a limited amount of resources, it’s a mistake that cannot and should not be afforded.

“There ought to be a way to use interactive media, especially the Internet…to report in real time allegations of corruption.” These were the words of Secretary of State Hillary Clinton during a plenary Q&A session at the 8^th Annual Forum on the African Growth and Opportunity Act (AGOA). Secretary Clinton called on youth and civil society to leverage new technologies to combat corruption through increased transparency.

* * *

As I flew into Jomo Kenyatta Airport in Nairobi, Kenya exactly two years ago, I had no idea the life-changing experiences that lay before me. I had studied the economic development of sub-Saharan Africa in great detail. Over the course of the following months, I lived it – and in no way did it resemble anything I knew prior.

My experience in Kenya was much unlike that of the many American tourists that find themselves in four-star air-conditioned tents while on safari. Rather, I was immersed in the local hustle and bustle of the dusty Nairobi city center. When I wasn’t in the office of the local e-commerce company I was working for, I was out exploring the country. I visited health clinics, children’s homes, Kibira schools, and rural villages. My feet were well traveled and had the sandal-tan-lines to prove it.

Corruption was, and still is, a well known problem in Kenya. There are two types of corruption anywhere you go in the world: that driven by desperation and that inspired by greed. Both have the same negative social impact, but each requires a unique approach toward amelioration. Chai, the Swahili word for tea, is commonly used as a term meaning a bribe. Police officers, during Kenya’s early years, were so underpaid that they would literally ask for tea, a staple source of sustenance, as what today we refer to as a bribe. This is corruption driven by desperation, and it still exists worldwide today.

Addressing need-based corruption requires raising living standards, lifting people out of extreme poverty, increasing wages and salaries relative to the cost of living, and so on. History has shown us that the best long-term and sustainable strategy for this in the developing world is attracting foreign direct investment (FDI). Filling the short-term transition period is often the generosity and assistance provided by donors worldwide and the admirable work being done by the non-profit sector.

However, when a country like Kenya is in need of outside assistance and investment, and the conscience of the developed world is prepared to deliver at almost all costs, it is the greed-based corruption of the gatekeepers that then stands in the way. Such corruption dramatically decreases the effectiveness of outside help designed to assist during the transition period. And it dramatically decreases the attractiveness of the foreign direct investment coming into the country to spur and sustain economic growth.

When left unchecked, the problem perpetuates itself. Donors send computers or toys to a children’s home where administrators turn the items around for profit and pocket the money. A multi-million dollar infrastructure project must be repeated only a few months later because the project manager sold necessary parts on the black market and covered it up.

Meanwhile, honest and hardworking organizations and businesses are being held back from achieving their full potential. The mere perception and stigma of corruption that hovers over the country like a rain crowd keeps donors, investors, and prospective clients from feeling safe or comfortable enough to put their money in Kenya.

I mentioned I was working for an e-commerce company at the time. It was my first introduction to “social enterprise”. These guys had created a way to leverage e-commerce and gift vouchers to revolutionize the way Kenyans abroad remit back to their loved ones. Through this website, you could pay school fees and electricity bills directly, deliver pre-paid phone minutes to a specific phone, send gift-vouchers for groceries or books; heck, you could even purchase and have delivered a goat. This company had found a solution for the challenge faced by many developing nations: how to target and harness the power of incoming remittances.

After my first week in Nairobi visiting local non-profits, I knew that what they needed were not $20 donation checks, per se, but real tangible supplies. Using our preexisting business plan, the company I was working for could easily create a new medium whereby anybody in the world could donate a physical object (or package of objects) and know exactly where their donation went! And that’s exactly what we did.

The challenge we faced, though, was that which I have already mentioned: a lack of transparency under the raincloud of perceived corruption. How can somebody tell apart our honest hard-working company from a fraudulent company in the same region. How can donors and investors follow through to make sure the computer or sewing machine actually made it to the school, and remains at the school four months later?

This is the social challenge that transformed itself into a business opportunity – today, International Transparency Solutions, LLC. Just as VeriSign built confidence around the infrastructural security of e-commerce in the 1990s, Transparency Solutions seeks to build confidence around honest businesses and organizations in the developing world.

By establishing a network of Transparency Professionals on-the-ground in countries around the world, we will be able to collect and deliver to donors and investors the intelligence and oversight capabilities that allow them to invest more responsibly, effectively, and with increased confidence.

For investment-seeking institutions that meet our designated standards of transparency and accountability, we will be able to offer a “Certification of Anti-Corruption” seal that can go on their website and solicitation materials. This will dramatically increase their ability to be recognized for their due diligence and stand above the stigma of corruption.

Through these services, we hope to see a shift in the cost-benefit analysis that individuals and organizations make when considering corruption. We provide the information and the tools investors and donors need to make the most optimal decisions for them – putting their money into transparent and accountable institutions. By incentivizing these characteristics, the opportunity cost of corruption rises. As the reward on greed-based corruption declines, investments and donations rise with increased transparency, and need-based corruption can be something of the past.

Through the very technologies that Secretary Clinton mentioned last week, we CAN work together toward growth and opportunity. We CAN address the social challenges that stand in our way. And we WILL.

* * *

International Transparency Solutions is currently putting together seed funding and lining up pilot-clients to conduct a pilot of their services this Fall in Nairobi, Kenya. For more information visit http://www.transparencysolutions.org

Author Bio: Marco Puccia is Founder and CEO of International Transparency Solutions, an early-stage social enterprise designed to connect investors and donors with the developing world. He also blogs about the interrelationship between business and international development at http://www.marcopuccia.com.

The following is a cross-post from the International Transparency Solutions Blog

Also, visit The Chronicle of Philanthropy for more great audio interviews!

Charity Navigator is a non-profit watchdog that ranks 5,000+ of the top US charities in order to give donors and investors the tools they need to decide where to invest their money. Transparency Solutions is in the process of building a similar system that operates on a global scale and targets non-profits in the developing world — adding a new layer of transparency and global credibility to help them unlock their investment potential.

We really like the Charity Navigator site, in fact we use it regularly to do research on US nonprofits that may be interested in our investment oversight services. They have gotten some criticism for the simplicity of their “four star” rating system, and we’re paying close attention so that we can learn from their experiences! Recently Ken Berger, President of Charity Navigator, shared his thoughts and announced changes the organization was going to be making in how it ranks charities. Here’s the podcast interview from The Chronicle of Philanthropy:

What Ken talks about really lines up with what we’ve talked about in the past regarding the importance of such a certification program and objective oversight. In the interview, Ken mentions how they currently base their ratings largely on financial indicators readily available in the IRS 990 form. But the system fails to account for measuring outcomes and program effectiveness as well as standards of transparency and accountability that I mentioned in my last post.

I can’t help but wonder what relationship Transparency Solutions and Charity Navigator can have in moving forward with creating a more thorough system for measuring charity effectiveness and encouraging responsible donations and investments.

The following is a cross-post from the International Transparency Solutions Blog:

I had a great conversation last week with Karim Harji, a Kenyan from Mombassa who now lives in Toronto doing social investment. We got on the topic of social investments and metrics vs. storytelling. Karim made the point that the nonprofit sector has relied heavily on storytelling as a means to advance their cause and raise funds. This morning I was reading this blog post, “Stories Can Change the World”, where the author writes, “Storytelling is the most important tool for any innovator. It is the best way to create emotional connections to your ideas and innovations.”

But the problem I see often in the nonprofit world, and to a degree in the social enterprise world, is that “emotional connections” are used to detract attention from important metrics such as Social Return on Investment (SROI), Real Return on Investment (ROI), and overall program effectiveness. Stories don’t tell you overhead costs or administrative salaries. They don’t tell you the associated costs (social, environmental, and financial).

So do we give our money to the best storytellers, or the most effective programs?

I think it’s obvious there needs to be a balance of both. While stories can elicit emotional connections and brand evangelism, storytelling needs to be authenticated and supported by some kind of standardized metrics system. This actually goes to the root of the discussions I’ve had on my blog about B-Corporations and Cause Marketing (Part 2). Authenticity matters!

This is one of the goals we’re trying to accomplish at International Transparency Solutions. We’re working towards creating a globally accepted set of “Standards of Transparency and Accountability.” Similar to programs in the US like Better Business Bureau and Charity Navigator, we’re creating a certification program that will span worldwide bringing “global credibility to the local level.”

We need your help, though! Our Standards of Transparency and Accountability have been published on our blog. They were built off of standards put forth by the Better Business Bureau, and we want to vet them through you! You can leave comments and suggestions and we will evaluate and integrate them into the document. Please help us by spreading the word about this to your friends and colleagues. Let’s generate some great discussion around this!

I just got news that I’ve been selected to pitch my startup company, International Transparency Solutions, at this years “The Feast Kitchen” event in New York City. Over 80 startups from around the world applied or were nominated, and only eight were selected to pitch — so it’s an honor to be among them!

From the website:

See what’s cooking in “The Kitchen” of the world’s most innovative and creative entrepreneurs looking to make the world a better place.

All Day Buffet will flip over every rock and boulder to find 10 startups who will have five minutes to pitch their ideas in front of 200 fellow entrepreneurs, investors, and press.

Here’s an overview of the other startups being featured (an awesome lineup!):

Michael Mossoba, Goodness500.org

Goodness500 makes it easy for people to learn which corporations are the most socially responsible.
Nicole Betancourt, Parent Earth
Connects busy parents to the newest and best ideas for raising healthy children on a sustainable and equitable planet.

Jose Serrano-Reyes, Trust Art
Trust Art is a social platform that is commissioning ten public artworks over the next year.

Monaqui Porter Young, Srina

Srina tea is 100% organically grown, hand-plucked, packaged and produced on a small scale farm in a rainforest in Sri Lanka.

Eli Halliwell, VotaVox
VotaVox collects opinions from voters around the world on issues that are meaningful to them.

Breatt Beach, Madecasse
Madécasse chocolate is the only chocolate produced bean to bar on the island of Madagasca.

Cynthia Koenig, Hippo Roller International

Aims to improve global access to water by making it possible to collect 24 gallons (90 liters) of water- five times the amount possible using traditional methods – in less time and much more easily.

The overall conference, dubbed “The Feast”, is put on by All Day Buffet, a NYC-based organization on a mission to “change the world through creativity and business.” The main conference will take place on October 1st, hosting an awesome lineup of speakers that includes:

• Annie Duke, Professional Poker Player (Yeah, and former Celebrity Apprentice finalist!)
• Joshua Viertel, Slow Food USA
• Uffe Elbæk, The Kaos Pilot
• Matthew Bishop, The Economist (And Co-Author of the Book PhilanthroCapitalism)
• William Drenttel, Winterhouse

Check out the website for more information! And I just got word that Kenyan musician Eric Wainaina is going to be performing in NYC that weekend as well! So I’m looking forward to an awesome trip!

Progress on getting International Transparency Solutions up and running has been a little slow lately. I’m still working on lining up seed capital for the pilot, along with several pilot-clients. Hopefully my attending SOCAP09 will help get the word out and spark some interest!

I wanted to take a minute to reach out to all of you, my readers, and ask for your support and assistance in moving this pilot forward! I’d greatly appreciate it if you could leverage your personal and professional networks to help spread the word!

I’m looking for prospective advisory board members, investors, and clients!

Thank you!

My apologies to followers of this blog — I’ve admittedly been distracted with work and have not been posting with the regularity that I’d like. I’m really excited right now, though, to share with you what I’ve been working on! Today I just launched the website for my up-and-coming social enterprise — International Transparency Solutions.

The business development process has been a long one, and the publishing of our website is a significant benchmark in our moving forward. Now I will be moving forward on gathering the financing and pilot-clients I need prior to my personal departure to Kenya to run our Pilot Program.

Let me tell you about the business:

International Transparency Solutions is a for-profit social enterprise designed to close the information divide between investors and the developing world. Transparency Solutions delivers due diligence intelligence and investment oversight services to individual investors and families, nonprofit organizations, and government agencies.

Our services provide investors with the tools and information they need to make socially responsible investments. As an organization, we hope to build confidence in responsible and accountable institutions in the developing world. Furthermore, our services in the long-run intend on changing the cost-benefit relationship that individuals and organizations make with regards to corruption and other improper business practices — what we like to call “incentivizing transparency, accountability, and due diligence.”

If you’d like to help out, please share this post and our website with your friends, family members, and colleagues. Encourage them to join us on Facebook or our e-mail list for news and updates, and to pass our website along as well! Also, if you have any ideas on possible investors and/or pilot-clients PLEASE introduce us!