Money into the bin or to projects?

This week the first chrismas charity mailing hit my mailbox – a thick wad of postcards painted by disabled people with their feet. Also in the envelope was, of course, a bank transfer slip.

What an awful waste! Because, as with 95% of all recipients, the mailing landed straight in my bin.

On the same day, I received a message from Brian Walsh, from Liquidnet for Good, quoting an article by William F. Meehan Why we need a more efficient social capital market – and how we can get there, with some figures about the inefficiencies of the market we work in (thanks Brian for sharing):

For starters, it does not have cost-efficient transaction processes, when compared to for-profit benchmarks. In the for-profit capital market, companies spend between $2 and $4 raising capital (e.g., legal, marketing, and administrative expenses) – for every $100 they raise. In the social capital market, however, nonprofits spend between $10 and $24 for every $100 they earn through fundraising (e.g., obtaining donor lists, sending direct mail, or making phone calls). Nonprofit chief executives, meanwhile, spent between 30 and 60 percent of their time pursuing donations with such “soft costs” unevenly accounted for in fundraising costs.12 Foundations and government grantors, meanwhile, spend about $12 to $19 on administration (including general overhead and reviewing grant applications) for every $100 they allocate.

That means that in the social capital market, the cost of raising capital consumes roughly 22 to 43 percent of the funds raised, a dreadfully inefficient process.

Together with other internet plattforms for the social sector, we are trying to stop this development by offering a cost-free (or low-cost) and much more transparent alternative for the raising of funds.

Please join us in this goal: everyone who donates during the festive season to projects on betterplace.org makes sure that more money goes to projects than into the bin.