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Trust works for business, why not for charity?

Paul Story in Edinburgh

Paul Story in Edinburgh

I met Paul Story in Edinburgh during the Fringe Festival last week. Paul is an author of fiction. I admittedly don’t read much fiction (Kurt Vonnegut aside), but when I met him, he was handing out hard copies of his novel ‘Dreamwords’, having dubbed them ‘The Honesty Edition’. Here’s how he describes ‘The Honesty Edition’ on his website:

“I ask people to help themselves to a physical copy of Dreamwords Book One on trust. They should pay only if they wish to see the rest of the series published. Book Two is complete but it needs to find its readers before it is able to survive. By trusting people to be honest I hope that future fans of the series will father the next book by paying for the one they have just read. Furthermore, honest readers who do not respond to the story are honour bound to find someone else who agrees to the honesty deal. This way, and with luck, each copy will have a chance to find its own champion. In an ideal world, I only want those people who enjoy the book to pay for it.”

Sounds a bit naive, doesn’t it? Giving people you’ve never met the product of your labour, on the trust that they will send you some money, some time down the road? Traditional economics and much old school psychology would both likely toss the idea before giving it a chance to breathe. Paul Story ignored them, maxed out a credit card and printed 10,000 copies to give out on the streets of Scotland.

“There are no tracking chips in the spine, no check-out tills nearby, no security cameras or guards monitoring the display and no legal documents to sign. The Honesty Edition has been designed so that the reader is free from any pressure to pay beyond their own sense of honour. My bet is that most people are trustworthy and that enough will enjoy the story to make this crazy idea work.”

Bias declared: I loved the idea from the moment I read the sign Paul had set himself up with in Edinburgh. That said, when he outlined some of the early outcomes, I was still very impressed:

  • He has made more on the books he’s distributed so far (from the money people have sent him online), than he would have if he’d sold them in stores;
  • The 1st thousand distributed copies of ‘Book One’ of the series have (I believe) gone ½ way to paying for costs of the entire run;
  • If he is paid the suggested £7.99 for less than ½ of the total 10,000 copies, it will subsidise the costs of both Book One and Book Two. Anything more pays his rent.

Post-Web?

Dreamwords cover

Dreamwords Book One

I see Paul Story’s ‘Honesty Edition’ as a ‘Post-Web’ experiment – taking the ideas underpinning the ways we’ve come to use the internet (to share, discuss and work together for mutual benefit on a mass-scale) and bringing them back into the ‘real world’ again.

Paul has trusted each of us who have taken a copy of the book to be both its funders and distributors – much as countless independent bands have done online in recent years – but primarily through people we are in human (rather than exclusively web-based) contact with. The internet will play some role in its potential success (it’s how payments are sent, people may Tweet/blog about it, etc), but this will be secondary to directly passing the book along to someone you think will appreciate it.

Much like how Shinobi Ninja, Steve Lawson and countless other musicians use Twitter and other social platforms, Paul Story lets the fan do his marketing, promotion and distribution, based-on the sense of value they/we get from his work. What’s most interesting to me is his structured experiment to see if the same behaviours will carry-over at a comparable scale in the non-online world…

Trust works

The key lesson I’ve taken from ‘The Honesty Edition’ is that even in the seemingly impersonal and self-motivated context of business transactions, trust works! As James Surowiecki, looking at the growth of successful Quaker-run businesses in eighteenth-and-nineteenth century Britain highlights, “as Quaker prosperity grew, people drew a connection between that prosperity, and the sect’s reputation for reliability and trustworthiness” [The Wisdom of Crowds, p. 119].

Dan Pink summarises a similar theme from Clay Shirky’s latest book, Cognitive Surplus, demonstrating the issues with creating untrusting structures in our workplaces, businesses and elsewhere in society:

“when we design systems that assume bad faith from the participants, and whose main purpose is to defend against that nasty behaviour, we often foster the very behaviour we’re trying to deter. People will push and push the limits of the formal rules, search for every available loophole, and look for ways to game the system when the defenders aren’t watching. By contrast, a structure of rules that assumes good faith can actually encourage that behaviour.”

In another recent piece, Pink writes: “Like any valuable relationship, the ones we have in business hinge on trust. And trust depends on openness, respect and humanity.”

What are voluntary sector organisations doing about trust?

So what have leading voluntary organisations and non-profits done with these ideas? My experiences have found very little, as many of us have clung to the traditional idiom that trust is at-best a naive guiding principle, and have structured our organisations accordingly.

Has your organisation bucked-the-trend? The voluntary sector should be leading the charge in this shift, but I’ve yet to see evidence that this is the case…

I’m hoping you can prove me wrong!


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20 comments

20 Replies

  1. Thisisnotariot Aug 24th 2010

    That is without a doubt the most inspiring thing I have read so far this year.

  2. Liam Barrington-Bush Aug 24th 2010

    Wow! High praise for Mr. Story! I knew as soon as I met him that people should know what he’s up to… seems to the beginnings of a very different way of doing business – and that has to be a good thing!

  3. @Thisisnotariot

    Wow indeed. Thanks for the kind words. It is gratifying to see so many people ‘get it’. When the idea was embryonic almost everyone I told thought it was crazy. Each person said that they would not steal the book but that too many others would. I believe that, given trust, most will repay it by playing fair. It is true that some won’t but it seems to me that the cost of protecting the books from theft by the few, kept them at a distance from the many.

    The reaction I get on the street is amazing and a number of fabulous things have happened that surprised even me.

    @Liam

    I have mailed you. Thank you for writing this and for linking the idea of principled business practice to the wider issues of altruism and trust. I hope the Honesty Edition speaks to a truth that is more important than the novel itself. Despite a constant barrage of bad news piped to us through the media, with luck, we will be reminded of our good fortune to be living among a vast majority of honest neighbours.

  4. There are reasons why the voluntary sector should trust –

    ● it counters officialdom not trusting individuals

    ● it manifests a good value that can influence the building of more trusting communities

    But there is learnt experience that turns the sector off trusting –

    ● Reduced trusting within the sector from being rivals for contracts

    ● cuts + that this is mostly done in a non-Compact compliant way

    ● lack of confidence on challenging public policies

    ● disbelief that trust would be justified or reciprocated and concerns at risk-taking at a time of insecurity

    For the sector, trust is more than a commercial operational thing and, as with the big society, it is for the sector to set its own agenda and vision. But if we are to succeed in moving to trust-based funding evaluation, then this presumably requires us to operate in a general context of trust. So it gets my vote, although how to move from what we should do to actually doing it may not yet be clear.

  5. Liam Barrington-Bush Aug 26th 2010

    As always Paul, you’re spot on!

    I think the last point is a particularly major obstacle – as it is with all of us as individuals at different times – if we trust others, are we putting ourselves at risk as a result? We are heavily conditioned to feel this is the case, but as Paul Story’s example highlights, or as the Netflix example exemplifies, when we trust people, (in many circumstances) they are more inclined to act in honourable ways.

    As to how we move towards this approach in the voluntary sector, a range of small-scale, but risky experiments will likely be needed to test the waters. Pulling out examples like these ones will hopefully increase the confidence of more of us to play with the ideas in their own organisations…

  6. Liam Barrington-Bush Aug 26th 2010

    For accuracy’s sake, I wanted to clarify some of the numbers, based on Paul Story’s feedback to me, to ensure this is as clear as possible…

    “On the ‘numbers’ front. You are mostly correct, but the payments
    to-date only make half the print costs when I forward project to
    include Book Two. This is reasonable because 90% of those who pay pass me their contact details and in paying are telling me that they want to read Book Two (which as you know is already written). Since I will be going directly to them when that book is published, the loss-rate will be virtually zero and the print run extremely efficient.”

  7. I recently conducted a similar experiment around fund-raising for charities, challenging some of the assumptions with “sponsored event” method of raising funds.

    It’s common to raise money among friends and family to complete a challenge, like running a marathon. I wondered if inverting this by completing the task first, then asking for donations after would work. There’s certainly a need for trust this way around, but I think the pertinent change is in placing the emphasis on the value rather than the transaction. Trust, while necessary, is an effect rather than a requirement in this scenario.

    The goal was to learn if this alternative method of fund-raising would work, which would open up a number of avenues for charities. So I planned to shave my head for Great Ormond Street Hospital, record it on video, and put it out to Twitter and Facebook to explain why. (If you’ve met me or followed my blog, you’d know this is a relatively big deal!) I had a similar reaction from most people when explaining my plan; “It won’t work – you should set a target amount and wait until you’ve raised the money.”

    I’m pleased to say the campaign has worked, and raised 3 times the amount that I would have raised if I had used the sponsorship model. And what’s better is that it continues to raise money. I think William Wardlaw Rogers put it this way – it’s the “long tail” of social fundraising.

    In my case, I think trust came naturally when the value of making a donation was emphasised over the transaction of donating. There was no disputing my reasons for shaving my head and thus the benefits of support the hospital were clear and credible. I wonder, Paul and Liam, if this rings true in your experiences as well? I’m interested in progressing this model.

    You can see the video and campaign here: http://saintsal.com/gosh I’ll blog what I’ve learned in more detail in the next few weeks as well.

  8. Liam Barrington-Bush Aug 26th 2010

    Great story Sal! Look forward to seeing the new, bald you! 😉

    RE: “trust came naturally when the value of making a donation was emphasised over the transaction of donating” ties in nicely with the Clay Shirky concept I quoted around establishing systems that expect the best, rather the worst of people, and getting better results from people as a result (i.e. – they trust you, because you’ve trusted them, if that makes sense)… Rather than the Pledge Bank model of ‘I will do this if you do that’, it becomes ‘I will do this, here are some suggestions for things you might do as well, if you feel so inclined’… and people often so feel so inclined!

    RE: my experience via my paid work, I don’t ask for contracts and have not yet been stiffed as a result. I also rarely give people quotes, and ask them to pay me some balance of what they think I’m worth and what they can afford… Early days, but still so far, so good! 🙂

  9. Very interesting post and thread of comments. I wonder if there’s an issue of scale to be taken on board here though: an individual artist, artisan or business person can take the risk and possibly do something else if it doesn’t work, but it’s more difficult for an organisation to provide goods or services at risk when they have a payroll and overheads to cover. The larger the operation, the harder it is to work without a business plan that will satisfy the auditors (and the Charity Commission if you’re so constituted).

    That isn’t to decry the spirit behind this post at all – I think it’s great. But we should recognise that relationships work differently at a collective level, and even more differently at a corporate level.

    The participatory budgeting model might be a good intermediate stage – a way of involving the wider public or service users in deciding what they want. The role of trust here would be that an organisation, charity or service provider would need to trust the public with decisions about its functions and future rather than assuming that what has been done and has been considered successful should continue to be done.

  10. So here we were wondering how to move from what we should do to actually doing it when Julian Dobson comes up with the first practical answer: participatory budgeting! This is a significant contribution, Liam, and I think it should be discussed with the PB Unit.

    Sure the factors of scale and the differences between the voluntary and private sectors are real and must not be ignored, although with our sector’s usual ingenuity I reckon a way may be found. But I can’t say I have found voluntary organisations that good at importing ideas from the private sector, perhaps for fear of losing our values.

    I happen to work for NCVO – well I will be for a few days anyway! – and generating income is important to the organisation. But that isn’t by any means to say that some publications, events and services aren’t free, What if these were on a pay-what-you-can-afford / pay-what-you-think-it’s-worth basis? That would be a total risk remover as well as seeing off auditors and charity commission – except for any praise they may give.

  11. Liam Barrington-Bush Aug 30th 2010

    Thanks Julian and Paul –

    Very interesting thoughts! I agree that participatory organisational budgeting could be a great step. The difficulty here is that if real trust doesn’t underpin this process, it could easily end up looking too much like the coalition’s recent ‘crowd-stomping’ (as opposed to ‘crowd-sourcing’) attempts to get public input on what should be cut and where govt can save money. When results didn’t go their way, they ignored them (based on their own perceived expertise over that of ‘the people’), undermining any efforts made by those who thought their opinions would be heard.

    I coordinated an international youth music project in 2006, where local hip-hop artists in Cuba had a very different idea of how they wanted us to support their work, than I/we had initially envisaged. Their opinions went against all of my personal judgements, yet, on the advice of others (Canadian and Cuban) I reluctantly let go, while local artists shaped the project in the way they felt best. And it worked! This was a really hard learning experience for me, but one that demonstrated the importance of exercising a trust-based approach in an organisational context.

    I would also argue for the necessity of risk – that the risk-aversion that has often kept trust from playing a more central role in voluntary organisations, also keeps organisations from breaking new ground, discovering better approaches and challenging ‘passable’ (but not especially effective) methods of working. (This ties into my thinking on monitoring and evaluation as well, another area where trust could play a bigger role).

    I very much agree that relationships work differently at collective and corporate levels, but that this is a fundamental piece of the problem (especially the latter); if we are to make our organisations friendlier, more approachable, trust-worthy and honest (‘#MoreLikePeople‘ we have individual relationships with), we will need to rethink the costs and benefits of keeping trust at the margins of what we do… Difficult as it may be to picture from our current position, I feel this shift is crucial if we hope to get closer to manifesting our sector’s values in the ways we work…

    Perhaps a future blog could look at the range of ways we could develop trust-based alternatives to specific systems and processes at work in the sector, as well as the benefits and risks that these alternatives could provide or pose?

    …But let’s start with participatory budgeting: perhaps with a clause that senior managers and board members will only have a single vote, in line with those of individual members/beneficiaries?

    Sorry for the lengthy rant! 🙂

  12. TRUST vs RISK? OR HOW NOT TO BE TOO TRUST-ADVERSE!

    (A) Is anyone suggesting a voluntary organisation moves to a total trusting strategy in one leap rather than suck-it-and-see?

    (B) Are there any examples of actual losses or even less income than normal charging would have produced? Isn’t it rather that if you pick the right things then you’re likely to be quids in while helping out cash-strapped customers or members?

    (This time around, I’m not gonna ask what prize can be afforded for the best answer)

  13. Hi Liam
    The issue of trust is core to voluntary organisations: indeed, there is an entire sub-discipline of voluntary sector studies devoted to it. Most relates to philanthropy and voluntarism – ie giving money or time is inherently dependent on trust because nothing is given in return.

    My predecessors at NCVO did a lot of work on this. To summarise – probably not very well – it seems to me that the sector has moved to relations based on trust (eg shared values) to relations based on confidence (eg use of contracts). The Compact was a good indicator of this shift for me: the endless comments that we need something legally enforcable, and that organisations had to have some sort of quality assurance badge, implies that we are no longer prepared to trust. Which is not helpful, as trust is such a significant ingredient in collaboration, particualrly if we want reciprocity. Incidentally, economists seem to have discovered this in the last few years, hence the interest in nudge theory. (Nudge theory could be applied to the book example by telling ‘buyers’ what proportion of people pay, and how much)

    The people to read here are O’Nora O’Neil (Reith Lectures a few years ago are good), Peter Taylor Gooby and I seem to remember some very interesting work from Adam Seligman, who highlighted the problem of trust as the basis for relationships. I also like a paper on climate change by Elinor Ostrom for the world bank that highlights why trust and reciprocity at the local scale are central to tackling climate change. She’s the nobel prize winner who writes about common-pool resources.

  14. Liam Barrington-Bush Aug 30th 2010

    Thanks for clarifying Paul.

    I’m not advocating a wholesale deconstruction of all of our existing system, just an honest valuation of the system we have, with a look towards seeing how trust could play a more active role, based partly on learning lessons where others have made trust work, partly by drawing inferences fr/ those lessons and trialling new ideas, based on similar principles…

    Perhaps a clarifying blog on how the importance of trust in personal relationships carries-over into institutional ones would be helpful? Why many of the same principles of building strong relationships are just as relevant in a professional context…

  15. Karl’s right – trust is at the heart of voluntary activity. And trust is also at the heart of a contract, but it’s a different kind of trust – one that says if you don’t deliver there are penalties. There’s a massive tension between the justifiable campaign by voluntary organisations for full cost recovery and the ‘big society’ idea of voluntarism (what the New Economics Foundation calls the ‘core economy’ of unpaid work).

    My participatory budgeting suggestion was to propose another level at which trust could be fostered, by involving users and citizens in setting organisations’ priorities. You could take it further by involving users in setting organisations’ purposes: instead of saying a charity’s aims are set in stone, involve users and wider stakeholders in periodically reviewing and updating them. Some organisations already do that, but it’s seldom a relationship of equals.

    You’d have to get over the hurdle of trustees’ personal liability though. It’s a difficult ask for the Charity Commission, which I think most of the time steers a sensible course between over-regulation and blind faith. However, I think we’d all benefit from extending ideas of co-design and co-production from public services to voluntary ones.

  16. Liam Barrington-Bush Aug 31st 2010

    Hi Julian and Karl and Paul –

    This is exactly the kind of discussion I was hoping would emerge from this blog – Thanks for your contributions (and reading recommendations) – really pushing my thinking on this!

    I agree that trust is at the heart of voluntary activity – I just worry that some blockages (possibly caused by a steady-diet of government contracts, dispassionate ‘realism’ and Social Return On Investment) may have developed somewhere between the heart and much of the rest of the body…

    I feel that saying trust is at the heart of a contract blurs the lines – every relationship requires a minimal amount of trust – if that didn’t exist, there would be no relationship. I think ‘the contract’ represents this baseline – the minimun required to make any type of working dynamic at all possible. As we move along the ‘trust spectrum’, towards something which could be called ‘blind faith’ or ‘postive expectation’ (depending on your perspective), we find working dynamics improve, as the relationships involved do.

    I very much agree that the Compact is a good example of the ideas at the heart of the sector – but unfortunately, there are too many contradictory messages that have followed it from both sides – messages (like some of the ‘dietary’ issues mentioned above), which run counterintuitively to the ideas of trust (beyond the level associated with a contract).

    There’s also the questions of who we (as organisations) trust, beyond who trusts us (as in donors, volunteers). My gut feeling is that trust works best when it is mutual – i.e. – when a volunteer isn’t told that they have to fill in a pile of forms, checks and other measures (with about as much implied trust as a contract) in order to give their time. As I said, I don’t have any data on this, but think the reciprocal nature of trust is as important as the ‘do those outside our organisation trust us’ questions.

    I’m especially interested in the nuts-and-bolts of the organisation, as I’m a firm believer that the systems we create at the more micro level (staff management, volunteer recruitment, funding relationships, decision-making processes, internal policies), tend to have ripple effects to the ways we interact in the bigger picture (i.e. – The Compact). I think participatory organisational budgeting could be a strong step in the right direction… any interest in working on a framework that might capture some of these ideas?

  17. just do it

    I can’t contribute towards the discussion regarding organizational funding
    but wrt the individual
    I am a proponent for just doing it
    and hopefully things will work out

    hasn’t worked for me all that well so far
    but what the hay 🙂

    there are certain qualities of ideas that arise
    that in response
    we can either virtualise by talking and writing about it
    or make real by putting it into action

    I respect those who act
    and I like paul’s book activity

    I also took part in sal’s funding drive 🙂
    thanks for the insight there sal 😉

    excellent vibe you are catching here Liam 🙂

  18. Liam Barrington-Bush Sep 29th 2010

    Hey David –

    I, too, am a great fan of ‘just doing it’… but there are so many personal and institutional barriers to this approach… I am constantly trying to address both.

    My ‘doing’ has been about how I get my work paid for (‘please contribute what you feel my efforts are worth, because this is how I make my living’), and this blog is one piece of my thinking…

    Thanks for jumping into the conversation! Trust is becoming a frequent theme in my work and will I’m sure appear in the blog again 🙂

    Liam


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