People have been asking for a while now whether there are too many nonprofits - either too many focused on accomplishing the same things, or too few able to prove social impact.

But now, as the nonprofit charity sector enters its third year of steep declines in donor dollars, a new question is dominating the conversation: are traditional, middleman charities -- whose purpose has been to raise money for various causes and spend it as their boards see fit - becoming obsolete?

To be sure, Establishment charities aren't just struggling for new dollars in this recession. They're also scrambling to regain credibility amid years of chronic waste, fraud and abuse dogging the sector. Traditional charities also are being pushed, hard, to reinvent themselves amid new competition from Web-spurred advocacy networks and the rise of new "sector-agnostic" mass activism initiatives, including new social enterprises. For some time now, philanthropy thought leaders have predicted that unless traditional charities fundamentally reinvent themselves as aggregators and issues experts -- and retool their funding models -- they could die trying. 

To be sure, the signs of a massive charity shakeout are already under way. Donor trust continues to slide, according to recent survey data, and donations are down, government funding is falling and traditional nonprofits - from arts councils to food banks - are locked in painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings. Industry estimates suggest a 30 percent rise in merger activity among nonprofits since this time a year ago, and rising. 

But it's not just about the money. Indeed, today's nonprofit charity squeeze is being driven by multiple factors -- not the least being the Web. Many charities still are hard-pressed to innovate using Web tools, and it continues to spur wide-scale disintermediation; roles are being redefined, like it or, in a world where it is now possible, and preferable in many cases, for supporters to "give direct" -- with or without charities to guide them.

Today's charity squeeze also is a wake-up call around today's ever-more urgent need to prove impact. According to Paul Light, a professor at New York University's Wagner School of Public Service, "there have been very many niche nonprofits devoted to small slices of a problem and they have needed to be merged." Light has, for years, suggested that chronic waste and fraud has done so much to weaken donor trust, and says that much of today's new thinking around the need for cross-sector approaches to social change is really an effort to "clean the slate and start over." 

Also fueling the death of traditional middleman charities? The rise of social enterprises, of course -- and the rivalry they pose for some charities competing for donor mindshare and private dollars. New corporate forms and models that recognize social businesses (such as L3Cs, and B Corporations); new calls for tax credits to social businesses, and new types of mission-related investing models and impact investing initiatives also are side-stepping traditional charities in the rush for innovation and impact.

Some sector leaders, including blogger and nonprofit consultant Lucy Bernholz, have even gone so far as to call for the creation of new, cross-sector input and alliances to help boost the efficiency and effectiveness of social change efforts across the board; Bernholz has expressed concern about the viability of the traditional nonprofit charity model in an era where giving silos between businesses, nonprofits, and other social-change advocates are rapidly disintegrating.

What do you think? Is the traditional charity dead or dying? Are the old, fragmented models of traditional, unregulated charities still viable when it comes to serving local and national communities of all stripes? Will economic and technological forces force the demise of the financially weakest charities, regardless of what they offer and what they've accomplished?

For the first time in more than 20 years, Pepsi will not be advertising during the Super Bowl. The soda giant usually produces clever, entertaining and very expensive commercials that are seen by over 100 million viewers. In 2008, Pepsi spent a whopping $33 million on ads for various products. But this year Pepsi is pouring its millions into a fresh new social media campaign geared at funding great ideas.

The Pepsi Refresh Project is searching for these ideas in non-profits, businesses and individuals that will make a positive impact to help improve the environment and "refresh" their communities. The company is giving millions to fund great ideas in health, arts & culture, food, the planet, neighborhoods and education. Starting February 1st, Pepsi plans to give away multiple grants including two $250,000 grants, 10 $50,000 grants, and 10 $25,000 grants. Visitors to the site are also encouraged to submit their own organizations and grant ideas.

Is this just a cost-cutting strategy for Pepsi? Partially. The Refresh Project will cost $20 million, saving $13 million that was spent on Super Bowl spots last year. Instead of blowing it all in one four hour game, Pepsi's investment strategy will attract visitors throughout the year and garner support from local communities, NGO's and small businesses. Rather than targeting drunken meatheads, the site will reach an active and growing socially aware demographic that may not be quite as enthused by Super Bowl mania. Regardless of its motives, Pepsi's initiative is another step toward mainstreaming crowdsourced philanthropy.

What the heck is crowdsourced philanthropy, you ask? In Paul Buchheit's (creator of Gmail and Google Adsense) blog titled Collaborative Charity, he declares "I'm going to donate a bunch of money, but I want random people on the Internet to decide where it goes." It's basically a case of market majority. While one donor doesn't necessarily have the breadth of knowledge to determine the best grant recipient, the market or the crowd, will supposedly choose the most effective project or highest priority need. One of the biggest benefits of crowdsourcing may be increased transparency. Donations based on public suggestion means less chance of bias or unethical giving.

There are still many unanswered questions about this fresh concept. Using technology to facilitate widespread giving seems to be gaining momentum, and the possibilities are endless. Tweeting or texting to support your favorite causes seems like a quick and instantly gratifying way to donate - both characteristics that today's web users value. Will it be embraced by caring consumers or seen as another passing trend in the endless battle to secure funding for social and environmental causes?

Green living is all the rage, but how much trash is out there? No, not greenwashing, I'm talking about actual garbage. The United States alone generates enough garbage to fill 63,000 garbage trucks a day according to the Clean Air Council. This Gyre picture created by Chris Jordan "depicts 2.4 million pieces of plastic, equal to the estimated number of pounds of plastic pollution that enter the world's oceans every hour," all of the image's plastic was collected from the Pacific Ocean." This piece is part of his "Running the Numbers" series. We as a society often disassociate ourselves from the trash we create because it is removed, out of sight, out of mind. So Jordan's work is a poignant reminder that nothing really disappears. Yet, reducing your trash can significantly reduce your ecological footprint including climate change. So what now?

Although we are all familiar with the recycle sign and the 3 Rs, how often do we actually put them into practice? Reduce is first because it truly is the most effective action in eliminating waste. By simply reducing what you purchase, you can stop the supply chain instantly. Of course it's not just about what you buy, it's about everything that you use including disposable silverware. Colin Beavan pointed out in his book No Impact Man the shocking revelation that the amount of resources and energy that are put into the creation and disposal of one-time use products like plastic forks is staggering relative to the amount of time you spend using the item. So taking green living seriously takes more than refraining from unnecessary purchases.

Our shopping choices can have a major impact on the amount of waste generated though. According to Elizabeth Royte's book Garbage Land, only 2% of garbage is from households, the rest is mainly from industry. She reports that "1 pound of sellable product = 32 pounds of waste." By purchasing products that are not only from ethical sources, but from waste-conscious companies is important. Many companies have started focusing on "lean supply chain management" and other methodologies to be efficient and cash in on the byproducts of their industrial processes. 

Eco-labels like Cradle to Cradle can help consumers identify products designed to minimize their environmental impact including their waste stream. So green living isn't only about reducing and thinking through what you buy, it's also about the entire supply chain of the product. This can be relatively hard to track, but eco-labels like Cradle to Cradle, and Forest Stewardship Council can help narrow it down. One final tip is to consider the packaging of a product, as it accounts for up to 1/3 of waste generated.

If you are interested in experimenting with a waste-free or reduced waste lifestyle, check out the green living experiments of Elizabeth Royte and Colin Beavan in their books. Royte weighs and sorts her trash weekly, and Beavan makes a "no trash" rule that leads him and his family toward a variety of unique solutions. Reduce, reuse, recycle, rethink -- it's that easy.

At their recent meeting in Canada, G7 finance ministers and central bankers agreed to work with the IMF to develop a global tax on banks to defray bailout costs and reduce global banking's exposure to financial risk . As of February 10, 2010, UK Prime Minister Gordon Brown seems confident that the IMF will be ready with a global bank tax proposal for approval by the G20 in June. Maybe that arctic dog sled ride distracted everyone, but it seems like this should be drawing some bigger headlines. What exactly is a global tax, have we ever had one before and why isn't anyone excited about it?

Stay calm. The IMF is not about to turn into the IRS. Global bank tax is somewhat confusing shorthand (confusing is an understatement, there's no such thing as a global tax...yet) for a few old ideas which have never been implemented as a package. What PM Brown has in mind is probably a variation on the Tobin Tax. In 1972 Nobel-winning Yale economist James Tobin proposed a small tax, no more than one-quarter of one percent, on every currency exchange transaction. The idea is that a very small transactional fee will discourage high volume, short short-term activity (currency speculation plagued central bankers in 1972), with little impact on the long-term investor. The Tobin tax was never adopted. Brown anticipates that the IMF will propose a similar plan of broader scope, a new tax, assessed as a very small percentage of a transactions total price, applied not just to foreign exchange, but to a wide range of financial transactions. Deterring short-term trading and related systemic financial risk is still part of the plan, but now the idea is also to raise revenue and allow the world's governments to recover some of those bailout costs.

Why "global"? Much financial activity is borderless. With some planning, financial institutions can legally shift activity to lower tax jurisdictions. Unless all, or at least most, of the nations that host serious volumes of financial activity adopt the tax it will become known as the bank relocation tax without producing the desired revenue or long-term, reduced financial risk orientation. This is a common tax issue, nations have been pledging harmonization and cooperation for years and there is still no such thing as a truly global tax. Whatever the IMF develops, each G7 or G20 member would need to adopt it separately, using its own, regular legislative process to approve any new tax. Getting 20 or even 7 countries to adopt the same new bank tax when each has different interests and each is building upon a different preexisting tax structure will be no picnic, to say the least, although the transaction tax approach reduces some of the friction with different preexisting structures. Even if widely adopted, the global bank tax won't have any impact on tax havens like the Caymans.

Will the global bank tax pass in the US? What if a few major financial host jurisdictions adopt, but some do not, will the early adopters then repeal rather than lose bank business? Could the tax be structured like a treaty, not effective until ratified by all the signers (presumably the G20 or some bank heavy subset thereof). All questions for future posts if the tax progresses.

If the G20 get creative they might structure the tax as a user fee wrapped into a formal treaty that includes some provision for international administrative cooperation and some non-binding aspirational regulatory goals. This could be the first step towards a truly global tax, but the treaty approach would generate heat on both a political and constitutional level in the US. In a Congress where every new tax is unpopular, a global tax might cause a riot.Would a user fee in a treaty approach need only Senate approval, as a treaty, or would the full Congressional taxing authority be implicated?

In any case, a global bank tax will create an exciting dilemma for some Tea Party populists - new tax equals bigger government - bad, bad, bad; new tax proposed by international organizations G7 and G20 and developed by IMF - worse, worse worse; new tax to punish fat cat Wall Street bankers, good, good, good. I see heads exploding.