Interesting social network welfare concept

[Pat McCotter]

What does one call this other than interesting? Darryl Penrice's life certainly has been.

Poverty's Demise.org (beta site)

PDO Shopping Mall(?)

PDO Concept

From City Limits.org
ONE IDEALIST'S PROGRESS IN FIGHTING POVERTY ONLINE
Darryl Penrice has been needy himself. Now that he's stumbled across a potential way to reduce want for everyone, he's determined to make it work. > By Curtis Stephen
Darryl Penrice likes to talk. His preferred topics of conversation can roam anywhere from the music of the late rapper Tupac Shakur and the murky underside of politics in America to the mechanics of macroeconomics. But if there's one subject that the 32-year-old Brooklyn resident and self-professed "ghetto prodigy" loves to discuss more than anything else, it's a vision of a new way to fight poverty that he's obsessed with making real.

For the past year, Penrice has been anything but silent about his proposal, meeting with an assortment of potential investors, city officials, nonprofit groups, college students and major grant-making institutions. In the midst of an outreach campaign, Penrice has been trying to earn support – especially the financial kind – to transform the website that he's created from a prototype into a full-scale, anti-poverty platform that he contends will have a significant impact in the lives of people experiencing economic hardship in New York and well beyond. "I know what I have," Penrice declares. "I'm not the most religious person in the world, but if God gave me a gift then I'm going to share it. This is something that can feed millions of people."

Penrice plans for his initiative – an interactive website called Poverty's Demise.org (or as he calls it, "PDO") – to combine the open source atmosphere of Craigslist with the opportunity-expanding aims of Kiva.org, which allows for "microfinance" lending to entrepreneurs in developing countries. But in many respects, if Penrice's ambitious plan ever goes live, it will launch an unprecedented Web-based undertaking.

Penrice envisions PDO as an outlet for person-to-person financial transactions in which donors help economically disadvantaged individuals – who have been screened and approved for participation – and struggling working-class families pay for essential daily living expenses, including everything from food and rent to utility bills and child care costs. Under the proposal, which Penrice details extensively on his website, the tax-deductible donations would be sent to recipients in the form of "universally redeemable" bar-coded certificates to be exchanged at participating retailers and service providers for specific goods and services. Incentives are also provided to both donors and recipients for volunteerism, and the purchase of healthy food and environmentally-friendly products.

The PDO model would also help to ease the burden faced by those on public assistance and seniors, both of whom are subjected to often-frustrating bureaucracies, Penrice charges. "The government is spending billions right now, but nothing is being done to fix a system that isn't very efficient," he says. "A lot of people are against welfare, but how can we tolerate a society where people who worked for 40 or 50 years are forced to choose between their medication or groceries?"

As he seeks to create a high-tech community-oriented platform that circumvents government and nonprofit social services, Penrice is clearly aiming big. He's hoping to land an investment of $4 million to make an initial run. In addition to setting up an office, hiring programmers and sparking the first wave of donations, Penrice plans to focus on New Yorkers in need before branching out nationwide. One endeavor that Penrice hopes to launch through PDO is a program he calls Broader Horizons, where disadvantaged families are sent abroad. "Can you imagine taking a kid from Bed-Stuy and dropping him off in Japan for a week? The problem with generational poverty is that Dad is in jail, Mom is smoked out, and you think the whole world is a ghetto."

And while much about PDO remains on the drawing board, it's already helped him to gain support from leaders in the field of social entrepreneurship, and to land meetings with officials in city government and at prominent grant-making institutions.

But Penrice doesn't just theorize about poverty. It's his own existence as a man who is financially down and out in New York City that makes it possible for him to understand the harsh reality of life on the economic fringe. "Dude, I just lived off $17,000 for two years. That's poverty by any standards," he says.

Penrice says that he gets the occasional paycheck whenever he's called to make computer repairs, but the meager earnings make it impossible for him to afford a room – much less the Brooklyn Heights apartment that he's been residing in for free in the past several months. The stylish dwelling belongs to "a sponsor" whom Penrice won't name. "We're as different as night and day," says Penrice. "Our relationship is just like PDO in some ways. The great thing about my website is that you don't have to understand anything about a person's culture or living standards. The only thing you have to understand is that poverty is wrong and that someone needs help."

Hard times

That a considerable number of New Yorkers will join those already in need of help is a foregone conclusion for the year ahead, as the crippling impact of the recession takes full effect. Meanwhile, Gov. Paterson and Mayor Bloomberg seem to be taking turns in announcing grim economic news and round after round of state and city funding cuts that go deep into the mission and operations of many public agencies.

Among the initiatives expected to be impacted is the Bloomberg administration's Center for Economic Opportunity, which has partnered with more than 20 agencies on a range of anti-poverty programs citywide since its 2006 inception. "Like all city agencies, CEO is working to reduce its annual budget by identifying savings and efficiencies in the midst of the difficult budgetary reality facing New York City," spokeswoman Kathleen Carlson said in a written statement. Left unsaid, however, was how the budget cuts will affect the lives of those who rely on CEO's programs.

As local and state legislatures nationwide grapple with rising budget deficits, charities increasingly have been called upon to meet increased demand, whether through food banks, soup kitchens or social service programs – even as the private sector dollars used to fund them appear to be drying up.

Penrice thinks many charitable ventures lack accountability and effectiveness, however. He argues that addressing intractable issues like poverty should rest with innovative grassroots-oriented approaches stripped of traditional bureaucratic structures, which he believes would allow for sustained contact with those most in need. But what makes Penrice such an expert? He's never run a nonprofit group, nor even worked for one. And by his own admission, he's yet to take a class in accounting. Instead, Penrice maintains that he'd be an effective administrator of his anti-poverty initiative strictly by virtue of his life experience.

He tells a story of a rough upbringing polished (to some extent) by a good education. He says he was born in Chicago and raised in a single-parent household with two siblings in a gritty neighborhood during the height of the 1980s crack epidemic. "My brother was the second largest drug dealer on the south side of Chicago," he claims. "People were carving out territories and everyone was gang-banging."

He says he gained entry in 1991 to the exclusive Wayland Academy in Wisconsin through an academic scholarship and loans. "You could imagine the adjustment I had to make because I just went from getting my ass shot off to living in '90210,'" he recalls. "Parents were pulling up in their Rolls-Royces. To this day, I still don't know how my mother found the place."

Yet he attributes his experiences at another boarding school, Northfield Mount Hermon in Massachusetts, with shaping his appreciation for economics. "One day we were discussing the natural rate of unemployment in class. I popped my head up and I'm like, 'Wait, I know these people,'" he recalls with a laugh. "They're talking about 'structurally-unemployed people' and 'seasonally-unemployed people' and how there's no such thing as 100 percent employment. If we know that, then why aren't we doing something to help them? People aren't just going to sit there waiting to die."

Penrice says he graduated with an undergraduate degree in Mandarin Chinese from the University of Michigan in Ann Arbor – although the National Student Clearinghouse, which colleges use to answer degree-verification requests, was unable to document that for City Limits. The decision to study the language came years earlier when he was given a spare ticket to attend a professional gathering in New York. "I met a guy from Wharton Business School who said that if I knew anything about a computer and was willing to work in China, then people will always employ me," he says. "That became my life plan."
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From broke to inspired

Six months after graduating, Penrice purchased a one-way airline ticket, grabbed $500 in savings and relocated to China, where he moved in with a college friend. "I got off the plane with the intention of launching an Internet company," he recalls. According to Penrice, he quickly found inspiration in the nightclub world. "I got tired of listening to techno every weekend and got together with several DJs to promote hip-hop shows," he said, asserting that he made a killing at the well-known Beijing dance music nightspot, Vics. "There's a lot of gray areas in China," he says. "Whenever I was hired for an event, I was brought in as a floor manager. But I was a floor manager who got a huge percentage of the money from the bar, the door and everything else. Money and girls, I had it all."

After an Internet venture went south, he returned to Chicago in 2005 with no money. So he made a tour of the city's social service agencies. "I figured that as an American citizen, I could apply for unemployment or some type of social welfare support," he says – but he came up short. He began working odd jobs as he stayed with family members and friends in Florida and Georgia before he found himself residing in an Atlanta homeless shelter for a couple nights. "I was a college-educated person who had all these experiences in China, but it didn't matter. I couldn't find a job."

By 2006, Penrice says that his fortunes improved a bit as he found temp jobs and a friend in Michigan to stay with when he made what appeared to be a mundane decision to log on to Yahoo's dating website. "I was looking at all of these profiles and I thought, 'What if this person was in poverty?'" Penrice says that four hours later, he sketched out the design for PDO. "It was all very logical. People still freak out when they see what I've designed so far. And I tell people that the value of the system is not what I've published already, it's in what I haven't published."

Selling it

As he contemplated enrolling in grad school, Penrice says that he decided to change course and focus strictly on PDO with the belief that he'd land financing and a lucrative partnership to run it. That fall, he decided to take an aggressive approach and set up a meeting, through a friend, with a representative of Google in Michigan, which by his own account went bust. Last June, after reading about the Bloomberg administration's Opportunity NYC initiative, Penrice traveled to New York to meet with an official at the anti-poverty philanthropic group, the Robin Hood Foundation. "Even I was surprised because a lot of people go, 'Who are you? You're not important.' But they took the meeting," says Penrice.

Although his meeting at Robin Hood ultimately led to no funding for PDO, Penrice was buoyed by what he felt was a positive meeting with an executive there – who did confirm that it took place, but preferred not to be named – and contacted the city's Center for Economic Opportunity. Penrice claims that he sent e-mails and left phone messages for CEO head Veronica White, before deciding to take a bolder approach. "I figured I would just go down there and introduce myself to her. You call, you e-mail and nothing, so you take the next step," he says. Penrice, who had no scheduled appointment with White, somehow convinced security to let him in.

CEO spokeswoman Carlson corroborates that account. "Darryl came to our office and we set up a phone call with him to explain what our office does. We made it clear that we don't give out grants," she says.

Penrice says he also had a meeting with a leader of the Ashoka Foundation, the Arlington, Va.-based organization that funds global initiatives employing entrepreneurial strategies for tackling social problems. That conversation did not lead to tangible results either, but it did increase Penrice's concern that – even as he thinks it's important to spread the word about his concept – there could be a downside to the wrong kind of involvement by others. He's worried that a rapid roll-out of PDO would instantly create copycats and a damaging ripple effect. "The hardest decision I ever made in my life was going public with this. We're already at the point where we're talking about the tipping point with consumption and now I have a website that proposes accelerating consumption," he says. "The world's resources are not without limits. We have to be careful. I really just wanted to get it to Google and have their lawyers keep it under wraps."

With his own frustrations apparently mounting in late 2007, Penrice sounded off on a blog in which he blamed racism for failing to secure financial support for PDO. He also attributes a number of financial and business setbacks to having the same name as his father, "a crack addict" he hasn't seen in years, whose identity has been confused with his son's. Most of the time, however, Penrice maintains his optimism – or at least his drive.

Thanks A Million, 2.0

Twenty-five years ago as the nation was in the throes of a sustained economic crisis, a weekly column entitled "Thanks A Million" written by the self-made millionaire Percy Ross began its syndicated run in hundreds of newspapers nationwide, including the New York Daily News. The premise was simple. Impoverished readers wrote letters that described their predicaments and Ross answered them. Whether the request was for food, a new television set or train fare to visit a sick relative in a distant town, Ross was said to have ensured the delivery of each specific item for the claims that he deemed legitimate. In his lifetime, Ross reportedly gave away more than $30 million. The column ran until 1999, three years before he died at the age of 85.

And while Penrice's website seeks to update that concept for the Internet age, some observers see PDO as a model very much in line with another contemporary development: the ever-expanding social entrepreneurship movement. Marriah Star, an adjunct political science professor at Lehman College and an ardent supporter of social entrepreneurship, met Penrice last year and invited him to Lehman to address a group of students about PDO. "Let's face it, Darryl isn't the obvious choice to run an organization like this, given his life story. But the thing that's most impressive about Darryl is that he has a long-term strategic vision," he says. "And this is a guy who has never been to business school. When you don't have a lot of money, you usually don't take the time to develop the vision, but he has."

But Penrice acknowledges that he'll need to spend more time developing the website itself – which, at the moment anyway, needs a major overhaul. He says that PDO is in "the very early stage" and that its amateurish appearance wasn't a priority compared to developing the business plan. Yet he continues to use the prototype in the effort to attract volunteers and, of course, dollars. But it still isn't known how PDO will be maintained and how much he personally stands to gain once it's up and running. "When people go on and they see this cartoon of a black dude...," he says without completing the thought as he starts to laugh. Turning serious, he continues: "People have this unnatural bias when they see this picture and think that I'm working on a scam or a hustle."

But Penrice claims that "100 percent" of the money supplied by donors would go to the recipients – a claim those with more experience in the charity world would have trouble swallowing. "I'm looking to build a very different model than the nonprofits use. The website will have all the financial transactions online for people to see. All the money will be tracked and accounted for like the receipts you get from an ATM machine."

Jonathan Morduch, professor of public policy and economics at NYU's Wagner Graduate School of Public Service and a prominent expert in microfinance, sees some potential with the model PDO proposes – but cautions that many questions about its likely effectiveness remain unanswered. "What I like about PDO is its emphasis on needs like paying the bills. Not everyone can use a loan to launch a small business," he says. "But a lot of people who donate are looking for tangible returns on their money. That's why Kiva is so successful. You're not just giving money away, which a lot of people worry creates dependency, but you're making an investment. There's also the assurance that a broader structure creates a trustworthy check-and-balance system that ensures accountability. PDO doesn't have that."

Meanwhile, as high-profile public figures like Bill Clinton and Bill Gates tout the virtues of social entrepreneurship, a wholesale cottage industry has emerged in the past decade as books, documentaries and college courses promote the theoretical principles behind the burgeoning discipline. Says Star, "If you had to boil a social entrepreneur down to two words, I'd stick with small and passion. Small is critical because they look at existing models in the corporate world and realize that the more we enlarge, the more we lose the ability to do what we're best at. Passion drives everything else. A lot of people think that social entrepreneurs are simply interested in doing good. Sure they are, but they're also interested in results. That requires a constant balance."

Or, as Heather Rees – who launched the NYC Venture Philanthropy Fund in March to support groups working in the arts, health, education, and other social initiatives – says, "only the strongest concepts will survive. The strongest in this case may not be the best idea, but the savviest entrepreneur who thinks outside the box."

That's a mild description for Penrice, who is hoping that his ambitious plans can be launched in 2009. He spends hours online, keeping an eye out for opportunities and says that he's feeling optimistic about upcoming meetings with potential investors. He's aiming to have PDO ready for a pilot-launch next summer. "I don't really have any hobbies because I can't let this go," he says. "It's like a fire is burning down the house and everyone is just standing by watching it. With PDO, I have the water hose."

- Curtis Stephen

This story has been updated. 12/24/08