The Shadow of the Future: Online Reputation Systems

Posted by irishg on February 23rd, 2005 at 11:29pm

In his book SmartMobs, Howard Rheingold describes the ” shadow of the future” as an important factor in building trust within online trading communities like eBay. In the unregulated world of the Internet, trust is an essential foundation for all online transactions, including making online donations to charity.

Rheingold describes how Ebay’s trust system works by creating a “shadow of the future” in which

the expectation of dealing with others in future interactions … influences behaviour in the present.

The way it works, if a buyer or seller are happy with a transaction that they have participated in, they can give that person a credit (+1) , or they can give a penalty (-1) if they are unhappy. Over time, the best, most-trusted traders accumulate a lot of credits (+’s) which serve as indicator of their ‘trusted reputation’ when they encounter new prospective traders.

The idea that relationships of trust are built over time, and that actions in the present affect attitudes in the future are not new. But what is happening in these online communities is that those qualities of “trust” and “reputation” are being codified and made transparently available for all to see - and to base their decisions on.

Reputation systems are an emerging phenomenon on the internet and they are a feature on numerous on commercial websites, in the form of “user ratings” and “user reviews” for products and services. Increasingly online shoppers are able to rely on “word of month” and recommendations from other customers as factors in their purchasing decisions.

It may not be long before we see reputation systems being used to help people make decisions about which charities to support — based on “user reviews” of each organization’s record of doing good work with the donations they receive.

This may not be a bad thing for many charities. Reputation is a foundation stone of all nonprofits and is the strongest currency they have with their supporters. Individuals who open their wallets and make a donation to an organization are doing so because of their high regard for that organization’s reputation. As “satisfied customers”, donors would be the natural spokespeople to provide “user credits” (+’s) in a charity reputation system.

We may never actually see the emergence of online charity reputation systems, but nonprofits can start using reputation-based strategies right now by engaging their loyal supporters as spokespeople.

Donors can be encouraged to tell others about what motivated them to donate, and to make recommendations to their friends, relatives and colleagues to do likewise. As well, having a donor testimonial web page on your website provides supporters the opportunity to post their “user review” of the organization they have chosen to support, and in that way encourage others to do so as well.

Turning your donors into spokespeople for your cause can be an important means to capitalize on your good reputation and expand your supporter base.

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