The long tail of charity

“The few that dominate” vs. “The long tail”

One of the most important influences behind the creation of betterplace.org was Chris Andersons theory of “the long tail”, which over the past weeks have come to our mind again and again.

First for those of you who don’t know what the theory of the log tail is:

in 2004 Chris Anderson, editor-in-chief of Wired Magazine, published an article about the long tail.Anderson (who later expanded the article into a book: The Long Tail: Why the Future of Business Is Selling Less of More) developed the theory that with the rise of the internet, niche products would immensely gain in importance and would - taken together - create more profit than mainstream products.

The long tail of music
He illustrated this business dynamic with regards to the music industry. Before the arrival of the internet, “the music industry” consisted of a few thousand records by a few thousand musicians: all the records for which music stores provided shelf-space. With the internet this has dramatically changed: because there are no restrictions of space, the music industry has greatly expanded. Now a band which plays Psycho-African-Trance-Reggae (a real niche product) can produce songs (and sell them), because there might be 500 fans, spread all over the world, who are willing to pay for their CD (or buy their music on itunes). Combined these niche products generate more profit than the “old” music business.

The long tail of charity
The Long Tail was very influential for our thinking about betterplace.org. Very early on, Stephan reckoned that there was something like the “Long Tail of Charity”, i.e. that the combined donations - in money, kind, time or knowledge - going to the 40+ large aid organisations, such as World Vision, Care or Doctors without Borders, are smaller than the donations reaching a long, long tail of small, largely unknown social initiatives. And that it would be fantastic if this long tail could be made available to a really large group of people, who would than have the opportunity to get in direct contact with one another.

With the internet, we saw the opportunity of making this “long tail of charity” available at no cost to a large number of users. Thus potential donors with very particular, niche interests, can now find exactly the initiative they want to support. An an anthropologist I have studied for a long time the highly differentiated life-styles of populations, in Germany as well as in Nigeria. Marketing experts divide populations into ever smaller and smaller niches, thus Claritas sees the Chinese-American population of San Francisco divided into five “clusters,” from Young Literati to Money & Brains.

Why should we than assume that we would be happy to donate our money, time, and knowledge to “the usual suspects”, the smallgroup of traditional charities? Instead, if you have been on a holiday in Tanzania and experienced the hardship of women there (or the bashing and even killing of homosexuals) you may want to make a difference right there. Ideally on a global marketplace such as betterplace.org you would find the organisation who is working to ameliorate the plight of women (for example by donating to this charity) or who is advocating gay rights in Tanzania.

I want to help the homeless
As we wrote at the beginning, we are reminded of this theory again and again. Thus, when Angela, who is doing the data analysis for the project team, presented us with an overview of the German private donation market, she could identify approx. 240 charities as recipients of the 4€ billion donated annualy. These organizations received 48% of the 4€billion. The rest of the market - 52% - go to unknown organisations, probably medium sized, small and very small initiatives. Here it is: the long tail of help. We see it everyday, when new organisations register on our plattform, many of them (as yet) unknown to the wider community.

And one more example from betterplace.org: some time ago a fundraising team had registered on our platform. Very quickly it gained real momentum (right now there are 406 team members, all of which have donated at least 1 €). The team was initiated by the makers of Pennergame.de, a German online game community. As Pennergame is about the homeless, the company sponsored 3 projects for homeless people in Hamburg and asked their game community to join them in their efforts.

Our guess is that most of the players don’t belong to the conventional group of donors to charities. They came to support the projects, because the game they are playing is controversial, as it (so our children tell us) envolves impersonating homeless. Judging from the 500+ comments on the Pennergame blog featuring the projects on betterplace, they feel that by contributing to real homeless projects, players can claim not to belittle the plight of the homeless and be aware of the difference between online games and real life. On betterplace.org they found exactly the projects they wanted, can easily donate to them and experience that collectively they can raise substantial sums, even if the individual amounts are small. (In this particular instance, so far 10.179€).