Salmon: When Crowds Disintermediate Charities

NEW YORK ( Reuters Blogs) -- Seth Stevenson at Slate has a problem that $703,168 was raised on the Internet for Karen Klein, the bullied bus monitor. That kind of money is "disproportionate," he writes, adding:

"Charities have always used poignant, individual stories to play on people's emotions and open up their wallets. But the idea was that you should donate to the charity, not to the individual sad sack with the most heart-wrenching video or the most prominent link on Reddit. Likewise, political and social causes have long used the specter of bad behavior to lobby for new laws and policies--but rarely to round up an angry mob that tracks down specific offenders. It seems we've decided it's more fun (and much easier) to collaborate in making one person happy or unhappy than it is to work together to change the underlying context."

Well, yes! It is more fun, and much easier, to make one person happy than it is "to work together to change the underlying context." And yes, that's one of the reasons why we do such things. There's nothing inherently bad about fun-and-easy, but Stevenson seems to think that there is. The hidden syllogism would seem to be that the $700,000 that went to Karen Klein is money that would otherwise have gone to change the underlying context, and that therefore there's something corrosive about the donations to Klein, because the alternative, while not as fun and not as easy, was in some sense superior.

But this is silly. At the margin, the Karen Klein campaign, along with all the publicity surrounding it, surely helped, rather than hindered, those people working to change the underlying context. And once someone has given $20 to Karen Klein, they will be more rather than less receptive to people asking for help on broader campaigns.

The fact is that almost none of us have some kind of annual giving budget, from which we draw when we send money to someone like Karen Klein. Instead, we give as and when we're moved to do so. Once you start giving money away, you're more likely to give money away in the future; Stevenson's implication, by contrast, is that giving money in one place makes you less likely to give money somewhere else. Which is completely wrong.

Still, phenomena like the Karen Klein campaign are interesting. As Stevenson writes, the vast majority of the money was given after it became clear that campaign founder Max Sidorov's stated aim -- to send Klein on "the vacation of a lifetime" -- had long been surpassed. Which means that the people giving to the campaign no longer, at that point, wanted to send Klein on a vacation. The whole point of the campaign, from the beginning, was to be excessive: to single out Klein and shower her with cash and goodwill, not because she was more deserving than anybody else on Indiegogo, but just because sometimes the Internet does excellent things for people. As the campaign snowballed, the very gratuitousness of it became its point: Thousands of people were giving money to someone who no longer needed it, just because they could.

Stevenson draws various lessons about "metaperceptual influence" online, along with "deindividuation through the enhanced opportunity for anonymity," all in the service of a thesis that there's "something inherently different about crowd behavior on the Internet." But he misses the simple and obvious point: that the Internet is so enormous that 32,000 is less of a crowd than it is a microsubset of people who think it's cool to do something randomly good in a vaguely coordinated and largely effortless manner. As Amanda Palmer puts it in this video at TED, on the Internet, a relatively small number of self-selecting people can be more than enough: enough to fund an album tour, enough to send $700,000 to a bus monitor in upstate New York, enough to make thousands of Harlem Shake videos. There's something random about these things: You can never predict in advance which ones will catch the wave and which ones won't. That's just the way the Internet works: It's a bed of a million oysters, and, randomly yet inevitably, some of them will grow pearls.

If you want to look at crowd behavior online, it seems to me that the place to look is not any of the million fads which flare up and die down in a matter of a week or two. More interesting, to me, are the political campaigns -- Howard Dean '04, Barack Obama '08, Ron Paul '12 -- which manage to excite a wired and youthful base. Those campaigns really are rival goods: If you support Obama you're opposing Hillary, if you support Ron Paul you're opposing Newt Gingrich. And they also share with political campaigns more generally the fact that giving money is generally done more for the benefit of the giver than it is for the benefit of the recipient: The marginal benefit of a donated dollar in a presidential campaign is very close to zero, in these ad-saturated times.

And that's surely the real reason why so much money flowed to Karen Klein: people who gave her money felt really good about doing so. They weren't trying to change the world, they were just making themselves feel good, and helping out a victim of bullying at the same time. It's the story of most successful Kickstarter campaigns, too: The feeling-good-about-giving part is much more important than the ostensible commercial transaction.

The Internet is the greatest disintermediating force the world has ever known, and it's going to have to change the way that charities campaign -- at least with respect to the ones who like to use individual stories as a way of raising collective funds. That worked much better when you couldn't help the individual directly. Nowadays, as a charity, you either need to give people the belief that they are helping the individual (as Kiva does, for example). Otherwise, you risk being disintermediated entirely by the likes of Max Sidorov.

-- Written by Felix Salmon in New York.

Read more of Felix's blogs at Reuters.