Software engineer Patrick Donohue left Silicon Valley during the dotcom days to design businesses for poor communities in the developing world.
After working in developing countries around the world, Donohue founded The Hoop Fund, a “crowd-funding” platform that enables consumers to invest in small producers – such as farmers and women’s cooperatives – in developing countries.
Devex spoke with Donohue, who is based in San Francisco, California, about his outreach and fundraising strategies and the future of ICT for development.
What difference does it make in fundraising to ask people to “donate” vs. to “invest”?
There are different levels of engagement that you get from each one. Donating is helping someone else do some good. Investing – if done right – is the way to also take part, to participate.
When you invest in something, in English, the idea is you “invest” or you become “invested in” something. And when you are invested in something, it means you feel like an owner; you feel like a part of it, you feel like a piece of something that’s bigger.
Sometimes, you want to donate money for a good cause because you believe in it; other times you could also invest your time, for example. Investment is that you often have a stronger connection element to [the cause].
There are different mechanisms out there. We’ve had different questions.
For example, people first ask about microloans: “If I donated, in the United States, I will get a tax reduction. What’s the benefit of doing a microloan?” And the response we give is that [with a] microloan or micro investment, the money comes back to you. You’re not getting the tax reduction, but the money comes back to you, you can do it all over again.
In our case, you’re not going to gain any interest on the loans. But again, it’s a way to participate more; to feel like an investor in products that are doing good.
A big part of what we’re trying to do is [to] enable everyday people to feel like owners of this movement. It’s like fair trade, like sustainability – to be owners [or] part of this movement.
The flip side of financing is ownership. And the flip side of microfinancing is micro-ownership. There’s a lot of value into having a lot of people feel that they’re part of this product, this movement. That they’re doing good for the world.
What’s going to be the next big trend in international development?
For international development, we work on a few levels. We work with U.S.-based consumers and customers. And then we work with both international and domestic producers of products. And one of the big trends that we’re riding on is the desire to know more about where your products come from and the people that are behind them.
On the basic level, you want to know that your products are safe. But on another level, you want to know that you could feel good about what you’re buying. That it wasn’t part of a supply chain that hurt workers [or] that hurt the communities where it was made.
On the same side, we have all these advances in technology – social media technology, information technology, access to the Internet – and networks are getting better throughout the world. [For instance,] I have access to technology today to find out what my childhood friend had for lunch today. That information doesn’t really matter to me, but it enabled that level of intimacy.
So, we also use that [technology] to form connections to people overseas in different communities – in all the communities where our products are being made. So you want to have that desire for a greater connectivity and greater knowledge about where your products come from – technology that enables that.
And the third is you have models that connect people on the other side of the planet. So, microfinance – the type that we do – enables people to connect through our microloan on different sides of the planet. You could feel like you are helping someone somewhere else, in a very direct way.
So, all these technologies exist. The need for and the desire for more connectivity is there. The ability to make those connections is there. They have huge implications for international development.
How do you reach out to folks that aren’t as savvy with the Internet or social media?
Some of the things we’ve done [to connect with people who are not tech savvy] on our own have been through different events where we tapped into. Either we involve in dinners or parties, or events that people are putting on.
We did a program this past Lent with a number of Episcopalian communities, churches.
The program that they were having was called “Eat, Pray, Grow,” and it was to remember to reconnect to where their food came from. We were able to provide them not only products like rice from Thailand and chocolates from South America, but also the stories that went along with those two products. And then if they wanted to, they could come on board The Hoop and either do it themselves – give a loan – or give it to the organizer.
So, part of it is when you reach out to these non-tech savvy communities, it’s to help give a person that is tech-savvy [the] materials and tools that he can then reach out to those people. So, you need the champions who can connect to you through the Internet to do that last kilometer, that last mile, to non-technical folks. That’s very important.
It’s a very interesting thing for us, because we have lots of young people that are like 22 to 27 years old, who don’t have a lot of money to be putting into the platform, but who could be advocates to their family members. They can actually play a role in helping to bring [their family members] in.
Some of our top funders include a 95-year old woman, but she’s very tech-savvy.
We work with producer groups and cooperative groups in different parts of the world. Most of the ones we work with have – even if it’s infrequent – access to the Internet, and are able to send messages to us, or back and forth.
But even when there’s some form of technical skills, we find there still needs to be some training on how you speak to the end consumer, or how you can tell stories that the end consumers are going to be interested in. They’re not interested in reading your bank report. But they’re interested in what happened in your village today.
So, one of the valuable skills – apart from just connection to the Internet – would be to create stories that pass over the Internet well.
We think it’s a very important thing. We’d actually love to partner with more people to do this because we think it increases the power of the producer if they have the ability not only technologically to speak to their end consumer, but also the best way to speak to them.
One final question if I may. What are the next frontiers for software engineers in international development?
I think there is a much larger opportunity for technology, whether designs or communities.
You can access the Internet as a community. [For example,] you’re in this community in the Amazon in Brazil – most of the content there is either designed by people at the top of the income pyramid for other people at the top of the income pyramid, or [by] people at the top of the income pyramid trying to design stuff for people at the base. There’s very little of the pure knowledge sharing. There’s very little of the people in those communities designing information, content or the technology for one another.
I think that there’s something missing there. It’s always someone like me designing the technologies for a different culture, or a different circumstance, or a different economic level.
From a technology perspective, there’s this huge opportunity for content that is designed by people who belong to the majority of the world – at the base of the income pyramid – for one another.
And in our current work at The Hoop Fund, for example, I would love for all the different producers and cooperatives or workers to share what they’ve learned with one another.
Read our previous 3 Questions for the Global Fund for Women’s New Leader Musimbi Kanyoro.