Small Open Source Nonprofit Defeats Groupon in Trademark Fight

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In May, Groupon created a tablet to help merchants process and serve Groupon customers. They called it Gnome. The hitch? GNOME was already trademarked as a worldwide, open source computer operating system. The GNOME foundation and its thousands of supporters mobilized to protect its name. Thanks to crowdfunding and social media, Groupon backed down and will develop a new name.

GNOME and the GNOME Foundation were created seventeen years ago and its trademark was registered in 2006. Located in California, the foundation’s mission is to open technology up to everyone through crowd-developing open source operating systems. Their products are translated into a number of different languages and include accessibility features supporting and encouraging users from underdeveloped countries. The egalitarian community includes computer programmers from around the world, including employees from one hundred different companies.

No doubt Groupon was aware of their work. In fact, Groupon’s own company blog describes the company as a “strong” supporter of open source programs. Additionally, GNOME products are used in the retail space as well as in “common software everywhere” and in many consumer devices, including televisions, tablets, and phones. Further, GNOME staff reached out to Groupon, advising them of their almost two decades of use of the name GNOME.

Instead, Groupon thought they could ignore GNOME’s efforts and FLOSS principles by filing for U.S. trademark protection. (FLOSS, or free/libre open source software—like GNOME—is created to encourage the use of technology by developing software that can be freely shared, used, and distributed. This is particularly helpful for people living in undeveloped countries who cannot afford to pay for essential computer software.) The conflict started out as a typical David and Goliath battle: Groupon ignored GNOME and filed 28 trademark applications. After all, the GNOME Foundation’s revenue stream of less than $600,000 does not compare with Groupon’s $2.5 million.

GNOME sounded the social media alarm and mobilized thousands of developers and supporters. Using the same crowdsourcing principles it uses to develop software, GNOME looked to crowdfunding to finance its battle against Groupon. Five thousand GNOME supporters fundraised over $102,000—thousands more than the $80,000 GNOME attorneys estimated they would need to contest the first ten trademarks. More importantly, thousands more people used social media to voice their anger toward Groupon.

Last week, Groupon raised the white flag and agreed to find a new name for their tablet. In a joint statement, Groupon and GNOME announced the parties would continue to work together to develop a solution.

Original cite: https://nonprofitquarterly.org/policysocial-context/25181-small-open-source-nonprofit-defeats-groupon-in-trademark-fight.html

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Gates and World Bank Back Tech Aided Access for the Underbanked

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Imagine living without a connection to a bank or financial institution. Your check from your employer must be cashed at a check-cashing store, where they charge 5 percent of the check amount. You cannot shop online, do not have access to credit, and are likely terrified of being robbed. If you need to send money to a child living in another state or family member living in your country of origin, you are charged 5-8 percent to send funds to them, and they then pay another 5-8 percent to cash the money order. Luckily, new technology is on the horizon to help millions gain monetary protections and increase credit opportunities, leading to small business expansion and more hope for those trying to climb out of poverty.

The number of people living in the United States and in the developed world without access to the convenience and safety measures banks provide is staggering. In the U.S., an estimated 9.6 million adults live without a bank account. Internationally, an estimated 2.5 billion adults, including 59 percent of people in the developing countries, live in a cash-only society without access to credit or other opportunities to grow their small businesses. Access is particularly limited for women in these countries: 63 percent, compared to 54 percent of men, do not possess an account. The numbers increases to more than 75 percent for adults living in extreme poverty.

In the United States, the end of the recession and the onset of new technology have created new avenues for the poor to access banks and financial institutions. According to the Federal Reserve, 25 million Americans built a relationship with a bank or other financial institution for the first time in 2013. Of those, more than a third opened an account because their new employer required direct deposit.

Unfortunately, for far too many, this new relationship is limited. The same report identified one in five, or over 67 million, underbanked Americans; this number remained constant from the previous year. The report defines the underbanked as those using a check cashing or other “alternative” service at least once in the last year.

For many, the relationship with their bank is limited due to a growth in bank fees and prior negative bank history due to the recession. A 2013 Bankrate.com survey found bank fees rose for the fifteenth year in a row. This limited relationship constrains the poor’s ability to exit poverty. According to The Cost of Cash in the United States, a Tufts University report, the unbanked and underbanked throw away more of their money on fees and spend more time waiting in line to receive their funds than those with full access to financial services.

Internationally, people remain unbanked because of lack of documentation, arduous regulations, and ineffective and obsolete financial infrastructure. They are unable to prove their assets, identity, or reputation, crippling potential business opportunities and leaving developing countries with little opportunity to grow. Fortunately, digital technology is changing access to money nationally and internationally, but in different ways.

In the U.S. and other developed countries, digital technology is creating a stronger connection between people and their money. New mobile applications allow people to deposit checks without visiting a teller. Text alerts provide notice of potential insufficient funds or low balance penalties before fees are accrued. Although these features are available to all account holders, low-income individuals tend to use them more. In the long run, they can turn the underbanked into full access consumers, but they do little to connect the unbanked.

Internally, technology is developing innovative financial systems that lead to new relationships with banks for millions of people. The epicenter for this growth is in Africa, where a partnership between the World Bank and the Gates Foundation is encouraging the creation of a digital payment system. One of the companies leading the way is M-Pesa. M-Pesa transmits funds via SMS or digital messaging. It was launched in 2007, and currently two-thirds of the Kenya adult population uses it, transferring funds with minimal fees of one to three percent. It is also available in the Democratic Republic of Congo (DRC), Egypt, Fiji, India, Lesotho, Mozambique, Romania, South Africa, and Tanzania.

The system is on the verge of tremendous additional growth, with last week’s partnership between M-Pesa and MoneyGram. The new system will connect funds between people in ninety countries using their mobile devices. Continued expansion of these services will open up $9.6 trillion in assets, according to controversial Peruvian economist Hernando De Soto.

We would love to hear from readers on this and similar projects.

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UNICEF: Social Service Programs Critical in Stemming Child Poverty

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The Great Recession wreaked havoc in homes across the world, leading to an increase in the number of children living in poverty. As the recession ends, families continue to struggle. Recently, the United States Census reported a decrease of 1.9 percent in the number of children living in poverty from 2012 to 2013. The United Nations International Children’s Emergency Fund (UNICEF) released a similar report for the period of 2008–2012, noting an increase in child poverty rates for more than half of the world’s most developed countries. The UNICEF report also identified government programs and social service agencies as the “decisive factor” in limiting the growth in child poverty.

Identifying children as the “most enduring image” of the Great Recession, UNICEF has released a report documenting the number of children living in poverty in the forty-one richest countries around the world. Entitled “Children of Recession: the Impact of the Economic Crisis on Child Wellbeing in Rich Countries,” it found an increase of 2.6 million children living in poverty in the developed world between 2008 and 2012. Overall, the number of children in OECD countries living in poverty increased to 76.5 million, including 11.1 million living in severe maternal deprivation—an increase of over 10 percent.

The report ranked the forty-one countries surveyed. It identified increases of over fifty percent in Ireland, Croatia, Latvia, Greece, and Iceland. In contrast, eighteen of the forty-one countries illustrated that an increase in child poverty is not inevitable during a recession. Children in poverty dropped by a minimum of thirty percent in Chile, Finland, Norway, Poland, and Slovakia.

Strong social service programs and agencies were, according to the report, the key to weathering the recession. Often, these programs protected some vulnerable groups better than others. The report identified 24 of 31 countries, or over 77 percent, where the number of elderly people living in poverty decreased while the number of children increased during the five-year period.

In terms of the United States, the UNICEF report did document a significantly higher increase in the number of children living in extreme poverty in the United States between 2008 and 2012, as compared to the recession of 1982. During the most recent recession, the number of children living in poverty increased by almost eight percent to 24.2 million.

More recently, the U.S. has begun to stem this tide. Last month, the United States Census identified a 1.9 percent decrease in the number of children living in poverty in 2013, compared to 2012. The decline was the largest since 1966.

The UNICEF report emphasized the need for the world’s richest countries to realize the cyclical nature of the world economy and develop a strong safety net in times of prosperity that will shield children during upcoming recessions. Clearly the recent growth in the United States between the income of the upper 2% and the lower 98% illustrates the huge gap programs would need to close.

But, to use a tired old thought, maybe this sector is about equity and some measure of economic justice, not simply providing a safety net within an increasingly unjust structure.

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Losses for Democrats Nationally and in Obama’s Home State

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Even in Obama’s home state, Democrats lost two key elections. For governor, Bruce Rauner, a social moderate and wealthy businessman, beat incumbent Democrat Pat Quinn. Additionally, in Illinois’ 10th congressional district, one-term Democrat Bruce Schneider lost in a rematch against Republican Robert Dold, who previously held the seat and served as aide to Senator Mark Kirk when he represented that district. These losses came after many visits from leading Democrats, including Michelle Obama, Vice President Biden, and even President Obama himself.

Although Governor Quinn continued to hold out hope until late Wednesday night, Bruce Rauner declared victory on Tuesday at 10:30 local time. The victory ends twelve years of one-party rule in Illinois and caps a campaign that set a record in political fundraising. Throughout the campaign, Rauner showcased his business expertise and used over $26.1 million of his own wealth to power his campaign’s many negative advertisements. Together, the candidates spent over $100 million.

Rauner also leaned on his wife, Diane Rauner, to persuade married women to leave the Democrat party and vote for him. Ms. Rauner is the president of the Ounce of Prevention Fund, though she does not draw a salary. The statewide organization with a budget of almost $50 million advocates for preschool for Illinois’ low income children.

Dold held the congressional seat representing the northern suburbs of Illinois from 2010-2012. The district was redrawn before the 2012 election. Dold does not currently live in the district, though he vows he will before he takes office.

Both Rauner and Dold identify themselves as moderates on social issues, including abortion, minimum wage, and gun control. But nonprofit organizations will not find much comfort or funding, as the Illinois economy remains weak. To make matters worse, Illinois’ unfunded pension liability is at an estimated $100 billion, and many economists place the figure at two to three times higher.

In the spring, Rauner funded a failed campaign to place a non-binding referendum on the fall ballot limiting state lawmakers to eight years in office. The initiative was focused on shifting the power in the Illinois legislature, since Democrats hold a large majority in both houses. State voters did have the opportunity to weigh in on four other referendums, including a successful nonbinding measure to raise the state’s minimum wage.

Rauner also has a history of supporting school choice and charter schools. This movement has led to low-income children becoming the new majority of those attending Illinois public schools. According to a new report from the Illinois State Board of Education, there were more children receiving free or reduced price lunch in the 2013-2014 school year than those not receiving this support. This is due to the growing number of suburban and downstate children living in poverty. Similar trends are seen in many Southern and Western states as well.

In a signal of the continued difficulties in the state, an immediate question for state leaders is whether they will let the Illinois income tax rate drop to 3.75 percent from five percent. The tax increase is scheduled to expire on Jan 1st, two weeks before Gov. Rauner takes office.

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