News from betterplace.org

One trend with far reaching effects (which gained momentum in 2009) is crowdsourcing ideas and solutions for social problems. Competitions — such as Google’s Project 10100 “Ideas that change the world”, Ashoka’s Changemakers, the Purpose Prize (for people who, in the second half of their life, make a large difference), and the Buckminster Fuller Institute Challenge — make it possible to attract a critical mass of innovative thinkers and ideas, publicize them, and to effectively hone the dialogue around them. Platforms for Micro-volunteering and Micro-work Crowdsourcing plays a central roll in some innovative platforms launched in 2009, such as the micro-volunteer site The Extraordinaries, or Catalista, which allow volunteers to choose and carry out simple tasks, like tagging photos in an online library archive. Notably, disadvantaged groups such as refugees or impoverished populations find—over these networks, as on the Samasource platform—avenues of integration into the work process. Mobile technology offers completely new possibilities for participation and feedback The “wisdom of the many,” (link in German only) channelled and publicised through the Internet, will take an enormously important position at the forefront of project evaluation in the coming years. 2009 saw large scale advances linking the technology of mobile telephones with development and humanitarian work. It is now possible for mobile phone users to send information to websites that then aggregate and publicise the information. Examples of this include the concepts available from Ushahidi or SMS Frontline. These developments have an exciting potential for us at betterplace.org, in that they could considerably raise the participation that support our Web of Trust. This activation of the Web of Trust and the development of such potentials for a radically improved participation and foundation of trust is one of the areas in which the betterplaceLAB looks forward to investing our energies in 2010.

Exciting developments in the social sector are being tracked in Anglo-Saxon countries. Those discussions will eventually also play an increasing roll here at home. Data, Measurement, Efficacy Following the financial crisis in the USA many organisations have, among other steps, refocused their energy toward measuring and conveying their impact. In the intensified competition for funding, only those organisations will succeed who are able to show that their labour is actually fruitful. Lucy Bernholz, the author of one of my favourite blogs, Philanthropy 2173, has identified the following trends for the American non-profit sector: Data dominates the discussions Whereas organisations used to pose to themselves the question “Should we measure our work?”, nowadays the question tends to be “What should we measure?” This clarifies that the portion of administrative costs in the total budget of an organisation is not the only important figure but rather a metric that makes sense only in relation to the assessment of an organisation’s actual overall achievement. In the last year, an entire horde of new measurement instruments have been developed and placed for use online, including Acumen Fund’s BACO, REDF’s SROI, Keystone’s Constituency Voice, and many other tools that are all summarized in the TRASI databank. (TRASI is the offspring of a cooperation between McKinsey’s Social Sector Office and The Foundation Center and offers information for 150 different tools – from questionnaires and surveys to certification protocols – all targeting the question of effectiveness among social projects). Higher demand for transparency Online technology makes it possible to save, structure and access data. Alongside this capability is a growing demand for transparency: if there is data, we would like to see it. That’s why, according to Bernholz, data are the new platform for change. The USA offers an entire buffet of websites, such as GreatNonprofits, Charity Navigator, Guidestar, InsideGood, Philanthropedia, and Give Well that serve as non-profit directories as well as give an internal look into the organisations’ structures, finances and evaluations. With this basis, it has become increasingly easier to assign a ranking to the organisations and initiatives, which in turn can radically influence the stream of donations. The new website Philanthropy In/Sight proves just how far this transparency can go with their comprehensive Google map showing in which regions and for which topics foundations and other non-profits are spending their money. In a similar vein, other websites such as Where Does My Money Go? show where public funds (in this case in Great Britain) are being administered. Giulio Quaggiotto wrote an enlightening blog post about the new demand for transparency on the PSD Blog of the World Bank. Augmented reality The same author writes an overview of Development Squared, the successor of Development 2.0, in which he outlines the implications of the newest web technologies (such as augmented reality, an “expanded” reality) for the policy and development sector. Insofar as it’s already possible with Google’s new goggles to identify and receive information about one’s surroundings simply by taking a photo (of a building, a house or a product) with one’s mobile telephone, it doesn’t seem a long stretch in the future to provide accessible information about wells, refugee camps or health stations. Where is the German directory of non-profit organisations? Whereas “Impact Investing” was one of the most important buzzwords in the USA for 2009 according to Bernholz—meaning a reorientation toward quantifiable financial, social and ecological impact-measurements—this development has only just arrived among larger German foundations, where it plays a minor roll in the choices of individual private donors. Although recent polls show that German donors would also like to know where their money has gone and what concrete difference it has made, we are still a far cry from requiring the kind of standards that could even closely resemble those that we call for in the business sector. The first step in Germany is to establish a simple, accessible comparison of non-profit organisations. After the previous failure of Guidestar to do just that in Germany, this will prove to be one of the largest challenges in the coming years. There are however already examples of starting points in Germany, among them Transparency International’s Transparent Initiative for the German Social Sector, followed by catalogue of disclosure requirements that we hope will gain broad acceptance. In Part 4, the last of these year-in-review posts, I will address new developments in Crowd sourcing. And - again many thanks to Becky for translating my German “2009-in-review”-blogpost!

At betterplace.org, we are naturally interested in the changes that digital technologies have affected on the social sector. Online fundraising continues to develop but remains in the small numbers In 2009 many German organisations discovered the potential of social media for furthering their aims. For the first time, fundraising guides explicitly added “Online Content” modules to their demanded courses. Small and middle-sized associations and foundations have meanwhile found that a website is indispensible, while large aid organisations have hired on Internet-specialised communications experts and brushed up old websites. Many German fundraisers signed onto twitter and facebook for the first time this year, and 2010 will see the first large-scale online campaigns to strategically gauge this potential for younger donor groups. Still, in Germany we are light years away from collecting truly significant gains over the Internet in contrast to in the USA, where just last month a call for help for 3,200 non-profits in Minnesota received 14 Million US$ within just 24 hours. Here in Germany only between 1-3% of donations are made online. At a renowned, multi-day conference on the topic of “Why do we donate?” in the scientific centre of Berlin, only one single presentation (mine) was offered on the topic of Online Fundraising. Despite the great successes achieved by German online donation platforms such as betterplace.org or helpedia, we have collected altogether in one year less than Just Giving collects in only two weeks, as the founder of helpedia, Sebastian Schwieker critically pointed out. (In 2009, Just Giving became a definitive household-name and clearly broke the record in the 500 million pound donor market). Still in the learning process In this sense, we at betterplace.org found 2009 to be the beginning of important learning processes for organisations and platforms. Increasingly, we grappled with serious discussions about how the Internet alters fundraising from and communications with donors. We want to share our learning process with everyone: for example, through our Good Practice Case Study, and the soon-to-launch Online Fundraising Toolbox. As to how enriching and unlimited the engagements through social media can be, the impressive last days of 2009 are self-evident: in the course of 18 days over twitter, facebook and blogs, a small Berlin flower shop received the necessary 10.000€ needed to keep its doors open. Calls to action such as this mobilize a completely new group of supporters—people (including so called Digital Natives) who, while not feeling at all compelled to join in an annual “Week of Civil Engagement,” are ready—with their knowledge, money and networks—to support social justice actions online. In Part III of the Year Review, we will address issues of transparency and development 2.0.

At the end of 2009 we published a 4-part review of the past year, combined with a look ahead to things coming to betterplace.org and within the social sector in 2010. Thanks to Becky in the betterplace team, we now have a translation: Donations decreased only slightly despite the crisis Initially there was much speculation in 2009 as to how largely the economic crisis would affect donor activity. In contrast to the situation in the USA, where in 2009 the average donation received was only half of what it was in the previous year, and almost all nonprofits reported grave financial losses, the financial crisis in Germany had (at least in the first half of 2009) a much less negative impact on the volume of donations overall. Donation incomes were indeed slightly decreased – the executive committee of the German Spendenrat figured 5% fewer donations related to anxiety over job loss and lower returns on investments by retired persons. The decrease in donations seems mainly to be the result of untypically high incomes due to natural catastrophes in 2008 in Birma and China, Pakistan and India, but also because organisations in 2009 sent fewer (expensive) donation request letters and received correspondingly fewer earnings. Donors preferred smaller organisations More Germans preferred to donate to smaller non-profit organisations this year rather than to the “usual suspects.” This trend was documented by an experiment at the Center for European Economic Research (Zentrum für Europäische Wirtschaftsforschung – ZEW) in Mannheim. The test involved 223 participants between the ages of 18-75 chosen to represent the German population. In the lab, participants made actual decisions about donating (in the mostly standard survey, test participants only answered hypothetical questions rather than donating money themselves). In 73% of the cases, small organisations were preferred to large ones (small was defined as organisations earning between 40.000 and 300.000€ per year). Only 27% of participants selected larger Institutions. Behind these results is a crisis of trust: many donors are asking themselves whether their donations to large organisations disappear in the cloud of administrative and consultant honorarium expenses rather than in the work of directly eliminating social injustices. In accordance with the Spendenrat, donors today demand more clarity and insight directly into the projects and balances. (Now, we should stress that transparency in smaller organisations in Germany is not per se better than that in larger organisations, and that administrative costs are necessary to further good work. This is rather a question of the relativity and quality of the achieved work). The trend toward smaller nonprofits coincides with a general trend in other branches. Music and bookstores have likewise experienced the replacement of the mass market by a swarm of digitalised niche markets. Online bookseller Amazon’s many sales of poorly circulated niche books—scientific essays, poetry collections, memoirs—far outweighs their sale revenues from the few annual bestsellers. For the social sector, this implies that the small sums that you or I donate to a local association in Brandenburg or to a social project in Mozambique have a more significant impact than the funds that are given to large, well-known aid organisations. In 2010 the “long tail” of aid will become even more meaningful More and more users will visit platforms like betterplace.org, global giving or Help India with the aim to find relevant organisations to match their interests. Nowadays platforms give small and middle-sized organisations more visibility than previously. But even large aid organisations can gain committed donors by clearly depicting their work and transparently accounting for their use of funds. At the same time, local projects will continue to gain increased significance, as was already shown in 2009. In this time of crisis, people are working much more on-site: at the source of the need and where, if in doubt, donors can drop by to check on a project’s work and to be convinced of its value. In Part II of our year review, we will look at the changes that digital technologies have in the social sector, and at the development of online fundraising in Germany.

Yesterday we welcomed a new manager for our Project and Organisation team at betterplace.org. I am very happy to introduce Björn Lampe to you who, together with Yvonne Andreas, will develop strategies and operations for our Project domain. Björn brings with him much talent and experience from his former jobs and activities and we are very excited to see how the Project landscape will be transformed within the coming months. But perhaps it’s best to let Björn introduce himself: Hello dear world change-makers! My name is Björn Lampe and I come out of a Political Science discipline. Since the end of my studies, I have worked actively among various enterprises in the fields of project management, communications and consultation. Among others, I have worked with C/O Berlin where an impressive photo installation b y Jonas Bendiksen—indirectly sponsored by betterplace.org—is on display (see our German blog post). Most recently I worked with the campaign Your Voice Against Poverty (Deine Stimme gegen Armut) and as the campaign manager for the Non-governmental organisation erlassjahr.de. I’m looking forward to working at betterplace.org and am available for all questions regarding projects and organisation.

Press Release from December 14. 2009 For the first time in Germany, Payback – together with the donor platform betterplace.org – has made possible a completely new method of online donations. Sponsorship for a bed in the Children’s hospital Bärenherz in Leipzig; dyslexia educational assistance for the children from socially impoverished families at Lichtblick Hasenbergl in Munich, School books for children living in the largest slum in Kenya – whether it’s an aid project in a local region in Germany, or a far-away foreign hotspot, millions of Payback members are now able to do good with their collected points. In the newly created Payback Donation World, members can choose to allocate their collected Payback Points to go 100% toward concrete aid projects. Members first select a project to support from among the many options and follow the directions online. The Payback Donation World was designed and implemented with betterplace.org know-how. “We were won over by the revolutionary donation philosophy of betterplace.org,” said the Payback CEO Burkhard Graßmann. “With this concept, Payback is taking a pioneering role in the donation sector. The platform enables that which donors today wish for: personal, concrete and comprehensive aid,” according to donor expert and betterplace.org CEO Till Behnke. Donors can see for themselves how their points are directly transformed into good on-site use, without bureaucratic hindrances and red tape. In contrast to anonymous donor accounts, the collected Payback points don’t all go into one big pot. Rather, each Payback member has before them the individual, concrete projects, initiated and implemented by real people who are available as references to the work being done. This is how projects are able to be created. And this is how the interactive Payback Donation World allows its members to take initiative to be a part of this good work themselves. The certification of non-profit status is a prerequisite for starting a project.

More than one million videos are viewed daily on the YouTube video platform. The latest printed edition of Encyclopaedia Britannica includes 65,000 articles – the English version of the Internet site Wikipedia with their 3.1 articles, offers 50 times more. And if the social network Facebook, with its over-300 million members, was a nation, it would compete with the USA as the third largest country in the world. It’s undeniable: the Internet is on the rise. It’s no wonder then that more and more donors are turning daily to online giving opportunities, especially during Christmas time. “The Internet is ideal for connecting people with knowledge worldwide. It offers exactly what donors are looking for today: more transparency of their money’s application and direct contact with those who benefit from their donations,” according to Till Behnke, founder of the non-profit Internet platform betterplace.org. With more than 20,000 members and over one million Euros of generated donations, betterplace.org is Germany’s largest donation-community. Behnke explains that the largest portion of gifts received stem not from the “classic donor aged 60 years and up,” but rather from those under 40, a much younger target group which until now has been inaccessible for the classic aid organisations. Younger Donors, better project comparisons, quicker feedback Access to new target groups is not the only appeal for using the Internet in the social sector. The benefits of online-donations are manifold. As with YouTube or eBay, it’s much quicker and easier to find what one is looking for on the Internet. On betterplace.org, for example, one can filter by region or topic to find specific projects. Then the donor can invest money, needed goods, or voluntary work — according to her wishes and personal interests – into helping the particular project of her choice, such as a children’s home in Berlin or a cooperative in Honduras that needs to install solar panels. Is a donor uncertain about how well the project seems to work? The Internets many avenues of communication allow for project managers to update their supporters regularly on the status of their projects. One can also review the publicly available project evaluations from other community members, many of whom have visited the location of the projects themselves. In finding a project to support, members are themselves supported by a wide array of online multimedia: videos, photo reports and blog posts are frequently sent to inform donors of the recent progress made on “their projects.” The multimedia communication possibilities can then also work to motivate other members to support a project. “Up till now, donating was a one way street. We want to make it into a roundabout,” says Behnke. Cutting fundraising costs online At the same time, the Internet cuts fundraising costs, which are often considered to be too high by classical aid organisations. Stephanie Sczuka, a fundraiser for action medeor, one of Germany’s largest medical aid organisations, says: “Conventional expenses for new-donor acquisition costs action medeor between 70 to 90 Euros. Our project on betterplace.org received 15,000 Euros within a short time. The acquisition of these new donors would have cost us around 17,000 Euros by conventional methods.” Of course, how the donor loyalty will continue to develop on the free platform remains to be seen, according to Sczuka. The Internet is particularly well suited to giving the countless small initiatives a chance to make their work known alongside the large aid organisations. These on-site projects were often previously unknown, now for the first time they have the chance to apply for online support worldwide. Those projects that are seated outside of Germany and therefore not recognized as non-profits by the German tax department or that are too small to qualify, can present their projects on betterplace.org without acquiring a seal of approval, a label which is often too costly for small organisations to obtain. Good intent and purpose: these are the only requirements to posting a project on betterplace.org. According to the 30-year old Behnke, the Berlin start-up doesn’t monitor the presented projects. This openness naturally raises criticism. Burkhard Wilke, the managing director for the German Central Institute for Social Questions, which issues the non-profit seal of approval in Germany, considers the open access to betterplace.org “risky.” He stated in the Berlin Tagesspiegel that the commentators on the betterplace.org platform could lie, using visually rich language to feign a help project for African children, while actually using the donations received for their own purposes. To this, Behnke replies: “Of course, we can’t check every project in the world – no one can. Everyone who works in the social sector has to be honest about that. However, alongside the well known and trusted validation-measures – such as the seal of approval or the recognized non-profit status issued by the revenue service – both of which we show on our platform, we are additionally able to highlight a previously overlooked dimension: individuals with their own positive – or also negative – ratings, on-location travel reports and comments.” Behnke sites Wikipedia as a positive example of this, as well as the rating systems for goods and services from other online associations. “This ‘mass intelligence’ is an important supplement to previous trust mechanisms. We believe that individuals and socially engaged associations are competent in finding the information that they deem necessary for their decision to donate.” No one on betterplace.org donates to projects that seem suspicious. Already convinced: Ashoka and Prof. Eigen, founder of Transparenc International Behnke and his team are not alone in their opinion. The betterplace.org concept is gaining more and more advocates, some of them prominent. Next to Ashoka, the world’s largest organisation for social entrepreneurs, Prof. Dr. Peter Eigen also supports the two-year-old portal. “The previous form of worldwide aid needs renewal. It must be transparent, participatory and immediate – like betterplace.org,” says the founder of Transparency International, a world renowned organisation that fights against corruption, which is known to be one of the largest problems for development cooperation. Thereby, Eigen says he has still never read a single Wikipedia article nor signed up for Facebook membership. He’s only ever seen a couple of videos on YouTube. One of those was about a project on betterplace.org.

This summer I was contacted by David Baumhauer, a student from the Otto Beisheim School of Management in Hamburg, who was researching his Bachelor thesis on the topic “Financing of Social Entrepreneurs” and had a few questions regarding betterplace.org. David, now studying for a Masters in Finance at Erasmus University Rotterdam, was kind enough to agree to write a blogpost about some of the interesting conclusions of his thesis. Here is David writing about a subject we are deeply concerned about ourselves: How efficient is the Social Capital Market? In this article I am writing on the question “How efficient is the social capital market?”. This question is highly relevant because an efficient social capital market would allocate capital to those organizations that earn the highest social return on capital without many losses due to market frictions. In an inefficient social capital market many resources are lost in finding good investments and investing in them and even organizations with excellent social results might struggle to get capital. If we compare the capital market (and here, the stock exchange) with the social capital market (the market supplying money for social innovation and NGOs) with regards to their operational, informational and allocation efficiency, we observe a number of striking differences. Many small organizations seek capital from many small givers On the stock exchange only small transaction fees have to be paid to buy and sell securities. Costs to raise capital in the capital markets are estimated between 3-10% of the amount raised for private companies. On the social capital market, these costs are estimated to be 22-43%. Furthermore, NPO executives spend 30-60% of their time with fundraising.[i] The reasons for these high costs lie in the fragmentation on both the capital providing and capital seeking sides. A study of The William and Flora Hewlett Foundation and McKinsey&Company finds 450 organizations helping children in Portland, USA and 125 organizations supporting the homeless in San Francisco.[ii] In private industries, a high number of organizations often leads to consolidation and top Management is incentivized by stock options for mergers. These financial incentives do not exist in the social sector. Also, there are few matchmakers that exploit Merger Opportunities and help companies find suitable partners. These are some of the reasons why there is a low Merger rate in the social sector.[iii] On the capital providing side, the majority of the capital comes from millions of single givers (9 million in Germany, 40 million in the USA). So in the end many small organizations are looking for capital from millions of single givers, an inefficient process. Capital aggregation on both sides would help to make the investment process easier. This could happen through a consolidation of smaller NPOs on the capital seeking site and through intermediaries like venture philanthropy funds on the capital providing side. These intermediaries bundle capital supply and demand. They also share due diligence costs between many investors and can thereby work more efficiently. Donation marketplaces and social stock exchanges can too play a special role as intermediaries. They reduce information costs and information asymmetries, for example by screening the NPOs that want to use the platform for their fundraising prior to listing them. BOVESPA (http://www.bovespasocial.org.br), a Brazilian “Social Stock Exchange” has only accepted 30 out of 1000 Projects in its first year. There are several other online donation platforms such as GlobalGiving, Give, Helpdirect, Justgiving, Charitynavigator and betterplace. Two projects try to create real stock exchanges for Social Enterprises: Recently the Rockefeller Foundation has given 500,000$ (360,000€) to develop the idea of a Social Stock Exchange in which shares of British For-Profit Social Ventures can be traded. The Genesis Institute also plans a Social Stock Exchange. “A millionaire does not really care whether his money does good or not …” The private capital market is so informational efficient that 75% of actively managed mutual funds underperform their benchmark index. That means that they cannot gain an advantage by reacting quickly to new information, because everybody else also does that and all information is reflected quickly in the market price. It is obvious that investors have every incentive to react quickly to news because they want to maximize their future payoffs and will try to allocate their funds such that they get the highest risk adjusted return on capital. On the social capital market the informational efficiency is inhibited by the operational inefficiency: It is costly to obtain information about NPOs. Furthermore, the incentive to get the highest social return on capital for private investors is not as obvious as for the investors on the stock exchange. This is particularly important, as the vast majority of funds is not given through intermediaries, but comes directly from private givers (75% or $229 billion in the US in 2007 and 90% or €3.3 billion in Germany in 2004). Bernard Shaw argued back in 1896 that for private givers the incentive to achieve a high social return on capital does not even exist: „A millionaire does not really care whether his money does good or not, provided he finds his conscience eased and his social status improved by giving it away…“[iv]. Practical literature for NPOs also assumes that prestige motives exist and suggests that NPOs pay special attention to their biggest donors and honor them. Economic theory on the other hand firstly assumed that people only give for altruistic reasons. In 1989 James Andreoni came up with the impure altruism model, which says that people not only give for altruistic reasons, but also for a so called warm-glow effect. This warm-glow effect includes the improvement of his social status and the good feeling that one gets from giving.[v] Andreoni proves that this effect exists, because his model can explain donation patterns that cannot be explained with purely altruistic giving. A study by Cunningham et al. from 2004 supports this impure altruism model by noting that private investors often do not care much about performance measurement and rather assume that “all giving is good”.[vi] If private givers do not pay attention to the performance of their investments, we cannot have an efficient social capital market. A solutions to this problem must be a change in paradigm from seeing the transfer of money to a social organization as a donation to seeing it as an investment that should yield a high social return on investment and which performance should be monitored. Again, intermediaries can play a role here. As many investors will lack the time to constantly monitor their investments, they can invest it via a venture philanthropy fund. The lack of standardized performance measurements On the stock exchange, the past performance of a company is easily observable from the financial statements of the company. Stocks are constantly monitored by analysts and the media who make projections about the future performance. If a company has performed poorly and the future prospects look bleak, then people will start selling its stock. An entrepreneur with a good idea on the other hand can get it recognized and will find investors that support him. On the social capital market, it is very difficult to determine where the capital is allocated best because there are no standardized performance measurement methods. The performance cannot just be read of a balance sheet. There are several approaches to tackle this problem, for example the Social Return on Investment method developed by REDF (www.redf.org.). This method monetizes the cost savings to society that a certain project achieves and compares them to its costs.[vii] There also exist many other performance measurement tools, but none are universally applied and accepted and many NPOs are not using them at all, which makes it difficult for investors to compare investments.[viii] Solutions can again be achieved by Rating agencies and Venture Philanthropy Funds that develop and implement performance measurement methods. Rating agencies provide standardized, comparable information about the performance of NPOs and reduce information costs for investors. Two European rating agencies are New Philanthropy Capital (www.philanthropycapital.org) in the UK and Bertelsmann Stiftung (www.bertelsmann-stiftung.de) in Germany. Intermediaries can make the market more efficient Concluding it can be said that the Social Capital Market today is likely not very efficient when compared to the stock exchange. However, in the past few years many intermediaries have emerged that play a key role in making the social capital market more efficient by reducing transaction costs through agglomerating supply and demand and reducing information asymmetries. Intermediaries can be banks and investment funds as well as pure information intermediaries like marketplaces and rating agencies. In developing economies, the existence and development of (financial) intermediaries has been an important factor for overall economic growth and in the social capital market they can play a similar role. In order to make these intermediaries succeed, there has to be a demand for the services of venture philanthropy funds, rating agencies and donation marketplaces. This demand has to come from private givers who want not only to give to ease their conscience, but also to achieve a high social return on investment and realize that they can best find these investments with the help of intermediaries. The recent public attention to the Social Entrepreneurship phenomenon will do its part to develop a more performance oriented, more efficient social capital market. [i] Meehan, William F., Derek Kilmer, und Maisie O’Flanagan. „Investing in Society.“ Stanford Social Innovation Review 1, Nr. 4 (2004): 34-43. [ii] The William and Flora Hewlett Foundation und McKinsey&Company. The Nonprofit Marketplace: Bridging the Information Gap in Philanthropy. 2008. www.givingmarketplaces.org/materials/whitepaper.pdf. [iii] Cortez, Alexander, William Foster, und Katie Smith Milway. „Nonprofit M&A: More Than a Tool for Tough Times.“ The Bridgespan Group. February 2009. http://www.bridgespan.org/uploadedFiles/Homepage/Articles/Mergers_and_Acquisitions/091702-Nonprofit%20Mergers%20and%20Acquisitions.pdf. [iv] Shaw, George B.. „Socialism for millionaries.“ In Essays in Fabian Socialism, von G.B. Shaw (Hrsg.). London (Neuauflage 1949): Constable, 1896. [v] Andreoni, James. „Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence.“ The Journal of Political Economy 97, Nr. 6 (1989): 1447-1458. [vi] Cunningham, Katie, und Marc Ricks. „Why Measure? Nonprofits Use Metrics to Show that They Are Efficient. But What if Donors Don’t Care?“ Stanford Social Innovation Review Summer 2004 (2004): 44-51. [vii] For a German application see Jahnke, Thomas. „SROI Kalkulation · kurze Zusammenfassung case study · enterprise 2001 - 2006.“ iq consult. 2007. http://www.iq-consult.com/files/enterprise_Zusammenfassung.pdf. [viii] For an overview see Clark, Catherine H., William Rosenzweig, David Long, und Sara Olsen. Double Bottom Line Projekt Report: Assessing Social Impact in Double Bottom Line Ventures, Methods Catalog. 2004. http://www.impactalliance.org/file_download.php?location=S_U&filename=11767042041Clark_etal04_DBL_IA.pdf.

Sometimes even larger organisations have to start from scratch. The German medical aid organisation action medeor has cared for the people in the poorest regions of the world for 45 years. Over 10,000 health clinics in 140 countries have been set up by the organisation. In 2008 alone, they distributed 360 tons of medication and medical devices worth over 10 million Euros. Anke Engelke, a well-known German actress and comedian, stands at the helm of action medeor. Join us at betterplace.org – invest in the future Why do large organisations like action medeor set up their projects on betterplace? Does every little penny really count for such a large organisation? The answer to such questions might sound silly but here it is: action medeor is investing in the future. “Through betterplace.org, our support base has grown to include new, younger donors,” says Steffi Sczucka, a fundraiser for action medeor. action medeor has the same problem as many other traditional aid organisations: the core foundation of donors is getting up in years. Whether their children or children’s children will contribute as eagerly as they have is questionable, increasing the pressure for organisations to seek out new core supporters. Relevancy is persuasive Steffi Sczuka made her way to betterplace.org through a friend’s tip. She liked the site’s appearance among other things, and decided to stay and setup a project online. In contrast to other small organisations like Twende Pamoja, Steffi didn’t send emails to friends, acquaintances or donors, since the latter are mostly offline anyway and continue their support in ways that are familiar to them. Steffi says: A large organisation often conveys the feeling of anonymity – people identify themselves differently with us than they do with the smaller, more personal grassroots organisations. Nonetheless, action medeor fared successfully on betterplace.org. Steffi’s reason: “We stay current.” One of the first betterplace.org projects from action medeor concerned the Cholera epidemic in Zimbabwe. Shortly after the catastrophe was broadcasted through the media, 2,000 Euros for 200 medical treatments were donated on betterplace.org. Due to the relevancy of the situation, the betterplace.org team highlighted the project—the project was mentioned in the betterplace teamblog and was included in the featured projects list. The competition for support between organisations boils down to this: “We were the only ones on betterplace.org who offered aid for the Cholera epidemic.” It was a similar case in September with the earthquake in Sumatra. At 2:00 p.m. it was in the news, and by 6:00 p.m. it had become a project on betterplace.org, remembers Steffi. The important acquisition of new, additional donors is very efficient. Posting the projects online doesn’t take much time,” says Steffi, “nor does the maintenance. The blog is kept up as needed. Extremely cost-efficient earnings from new donors Acquiring a new donor conventionally costs action medeor between 70 and 90 Euros. That’s about the cost of 20 mosquito nets. Many large organisations even spend a third of a donor’s “lifetime value” on this acquisition. Steffi came to betterplace.org from the start also because of the people who work for the internet platform, real people she can call who take her questions or dialogue with her to develop ideas. In this way, the organisation remained forefront in the awareness of the betterplace project team, who took an interest in promoting the cause to betterplace corporate clients on the lookout for nonprofit partners. The result: in one year, action medeor has received 12,250 Euros from 212 donors. Obtaining these donations by traditional methods would have cost around 17,000 Euros. This group of donors gave on average 57 Euros to action medeor. Conventionally, this would never have been enough to cover acquisition costs, whereas betterplace.org ensures the most bang for each buck, helping more people and directing support to where it should go. Since donor trust is a worthwhile value, and transparency should never be ignored, Steffi will soon apply to fill a need that seems less exciting: administrative costs. Although betterplace.org forwards 100 percent of donations received to the organisations, one shouldn’t forget that large organisations must always use a portion for general administrative costs. Anke Engelke: an ace up the sleeve Besides the relevancy of their quickly-posted aid projects, action medeor has another ace up their sleeve: Anke Engelke. The well-known German actress is an inimitable advocate and uses her notoriety to draw visitors from betterplace.org into action medeor’s project pages. But Steffi won’t let this be the only distinction from other competitor projects: “You have to do something unique with your projects,” she says, and has plans to post more videos to betterplace.org. Though the conventional methods of fundraising are still dominant, Steffi believes that online fundraising, as on betterplace.org, will continue to grow.