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HOPE CONSULTING CONFIDENTIALMAY 2010
Money forGood
Special Report onDonor and InvestorPreferences for
Supporting OrganizationsWorking Outside the US
HOP E CONSULT I NG
MAY 2010
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Important Context for This Report
1
INTRODUCTION AND CONTEXT
This report is an addendum to the full Money for Good Report (Money for Good:
The US Market for Impact Investments and Charitable Gifts from Individual
Donors and Investors) and should be viewed alongside that document.
The full report contains useful information on the context for the project, themethodology used, and the general findings surrounding donor and investor
preferences, behaviors an demand for charitable gifts and impact investments.
These general findings contained in the main report should be of interest to
organizations that focus outside the US. This report focuses largely on how
international donors and investors are different, and what additional
recommendations exist for organizations that focus outside the US.
While this addendum talks broadly about donor and investor preferences for
international giving and investing, we have paid particular attention to donors
and investors who support international entrepreneurship.
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The Goal and Structure of the Money for Good Project
2
INTRODUCTION AND CONTEXT
The goal of this project was to understand US consumer preferences, behaviors, and
demand for impact investment products and charitable giving opportunities
(together, these make up the money for good market), and then to generate
ideas for how for- and non-profit organizations can use this information to drive more
dollars to organizations generating social good.
The main document focuses on three questions:
1. How can nonprofits more effectively obtain donations from individuals?2. How can a greater share of donations go to the highest performing nonprofits?3. What is the market potential for impact investing and how can it be realized?
This document addresses one additional topic:
How can more capital be driven to organizations operating outside the US,
particularly to those focused on international entrepreneurship?
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1. Summary of Findings and Recommendations from Main Report p 4 62. Supporting Organizations Operating Outside the US p 8 253. Appendix: Segments p 27 30
Agenda
3
1. Summary of Findings and Recommendations from Main Report p 4 6
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Increasing Charitable Donations From Individuals
4
F INDINGS AND RECOMMENDATIONS FROM MAIN REPORT
Key FindingsRecommendations For Nonprofits to
Improve Fundraising Capabilities
A. There is $45B of market opportunity, limited in partby high levels of loyalty in charitable giving
B. Donors are generally satisfied with nonprofits, butcite being solicited too often as their key area of
frustration
C. Few donors do research before they give, andthose that do look to the nonprofit itself to provide
simple information about efficiency andeffectiveness
D. Behaviors matter: there are six discrete segmentsof donors with different primary reasons for giving
E. Demographics dont matter: HNW donors behavesimilarly to others
A. Segment on behaviors, not demographicsB. Tag and track your donors by segmentC. Determine what segments are best for your
organization, given your strengths
D. Develop consistent outbound marketing thatappeals to target segments
E. Prioritize investments based on what will drivedonor behavior
F. Capture donors earlyG. Understand how to manage different segments
when approached
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Increasing Donations to the Highest PerformingNonprofits
5
F INDINGS AND RECOMMENDATIONS FROM MAIN REPORT
Key FindingsRecommendations To Increase Funding
to High Performing Nonprofits
A. While donors say they care about nonprofitperformance, very few actively donate to the
highest performing nonprofits
B. Changing this behavior will be difficult givendonors varied motivations for giving, their loyalty
to the nonprofits to which they give, and the fact
that they believe that nonprofits perform well
A. There are three primary opportunities toimprove the quality of giving:
1. Closing the care vs. act gap2. Closing the quality information gap3. Closing the good vs. best gap
B. The Care vs. Act and Quality Information
gaps are the top priorities and can beaddressed concurrently by
1. Providingsimple information donors will use2. Pushing information to the donors3. Building broad awareness around some
select key messages
C. The opportunity to close the Good vs. Bestgap lies with the High Impact segment
D. Foundations can also help direct more capitalto high performing nonprofits by helping them
to develop superior fundraising capabilities
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Realizing the Potential of the Impact Investing Market
6
F INDINGS AND RECOMMENDATIONS FROM MAIN REPORT
Key FindingsRecommendations To Unlock the
Impact Investing Market
A. Most individuals are open to impact investing, butneed to know more
B. There is $120B of market opportunity, half of whichis for smaller (
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Agenda
7
1. Summary of Findings and Recommendations from Main Report p 4 62. Supporting Organizations Operating Outside the US p x y3. Appendix: Segments p 27 302. Supporting Organizations Operating Outside the US p 8 25
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Context
8
SUPPORTING ORGANIZAT IONS WORKING OUTS IDE THE UNITE D STATES
In addition to looking into behaviors regarding charitable donations and impact investing,we also investigated individuals preferences for donating to organizations that work abroad,
or for investing in developing countries
In the following pages, we have summarized the relevant information regarding howinternational donors/investors are different from others. However, it should be noted that onmost dimensions these donors/investors do not have different behaviors or preferences to
those who focus domestically
To test international giving behaviors and opportunities, we were able to look at the data cutonly by those that said they donated to Organizations that do charity work outside the US
Since Impact Investing is a newer market, we were only able to look at the data cut by thosethat said they invested in developing countries. However, this applies to all investments, notjust impact investing
We focused particular parts of our analyses on those who support InternationalEntrepreneurship specifically, but given smaller sample size we did not focus solely on that
population
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Executive Summary
9
SUPPORTING ORGANIZAT IONS WORKING OUTS IDE THE UNITE D STATES
A. A third of respondents donated or invested in thedeveloping world
B. The top drivers for these donations/investments arenot international in nature (they are responses to
disasters or driven by other motivations)
C. While international donors are similar to others onmost dimensions, they are more engaged
D. especially when they support internationalentrepreneurship...
E. and they are willing to donate more in the futureF. The same levels of engagement hold true for those
who invest abroad and especially for those that
invest in economic development/entrepreneurship
G. The barriers to increasing international giving arehard to overcome
H. The barriers to increasing international impactinvesting are focused on risk
A. Overall, focus on recommendations forcharitable donations and impact investing
B.
Proactively provide additional information todonors on performance and impact
C. For donors, focus on the 30% that already giveinternationally
D. For investors, focus on the 35% who alreadyinvest in the developing world
E. Structure products and marketing to address topbarriers to investing in developing countries
Key FindingsRecommendations To Increase
International Donations/Investments
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30% of respondents donated to organizations thatoperate outside the US
10
% Donors
22%
% of Respondents who Donated To:
54%
52%
46%
41%
37%
36%
32%
30%
30%
30%
21%
14%
8%
5%
0% 10% 20% 30% 40% 50% 60%
Place of Worship
Local Community Orgs
Education
Health / Healthcare
Children / Youth
Fundraising Orgs
Poverty / Social Welfare
Outside the US
Arts/Culture/Humanities
Animals and Wildlife
Women's Issues
Environment
Other
Econ Development /Entre reneurshi
Donations within International
64%
44%
35%
23%
20%
18%
14%
13%
13%
12%
8%
6%
2%
2%
1%
0% 10% 20% 30% 40% 50% 60% 70%
Emergency Relief
Children / Youth
Health
Education
Water / Sanitation
Econ Dev / Ent / Mfnce
Human Rights
Housing
Women's Issues
Agriculture
Environment
Other
Energy
Info / Communications
Transportation
A. PARTICIPATION
We will focus some of our findings specifically on those that support entrepreneurship
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35% of respondents invested in developing countries
(Refers to any investment, not just impact investing)
11
Investment Within Developing World
42%
36%
28%
28%
27%
24%
23%
23%
22%
20%
19%
17%
15%
12%
12%
0% 10% 20% 30% 40% 50%
Energy
Health
Econ Dev / Ent / Mfnce
Info/Communications
Education
Children/Youth
Agriculture
Water/Sanitation
Transportation
Emergency Relief
Other
Environment
Housing
Women's Issues
Human Rights
94%
44%
35%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
North America Other DevelopedAreas
The DevelopingWorld
Where People Invest(All investment not just impact investing)
A. PARTICIPATION
Figures refer to % of respondents in the survey
We will focus some of our findings specifically on those that invest in entrepreneurship
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Many international donors are not necessarily focusedon the international nature of the charity
54%
33%
27%
23%
22%
19%
19%
6%
5%
0% 20% 40% 60%
Respond to Natural Disaster
Other Reasons (Happen to be Int'l)
My Issues Affect Those Outside US
Learned About Issues Abroad ThruTrusted Source
Dollar Goes Further in DevelopingWorld
Biggest Social Needs are Abroad
Saw Challenges Thru Travels
Most Innovative Ideas Abroad
US Orgs Receive Their Fair Share
70%
selected at
least oneof these
Why People Gave Internationally1
1. Respondents allowed to select up to three options
B. DR IV ERS OF PART ICIPAT ION
The top two reasons do notpoint to a core interest in
international giving, per se Respond to natural disaster Other reasons
30% of donors that donateinternationally selected only
one of these two reasons
The 70% of donors with moreof a core driver for
international giving do it for a
wide range of reasons
30%
selected
only these
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Traditional investment rationale drive the choice toinvest in the developing world
57%
34%
27%
25%
18%
16%
15%
15%
10%
5%
0% 20% 40% 60%
Diversification
Expect Higher Returns
Lack of Capital in Developing World
Biggest Opp's are Abroad
Heard from Trusted Source
Other
Personal Travels
Cause Doesn't Affect US
More Innovative Ideas
US Has Fair Share
Why People Invest in Developing World1
B. DR IV ERS OF PART ICIPAT ION
The top two reasons donot point to a core interest
in developing countriesper se, but are rather a
means to maximizing their
investment portfolio
Diversification
Expect high returns
1. Respondents allowed to select up to three options
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People that donate to international nonprofits areoverall more engaged in charitable giving
14
% Donors
22%
% Donations1
xx%
44%
35%
0%
10%
20%
30%
40%
50%
DonateInternationally
Non-InternationalDonors
78%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
DonateInternationally
Non-InternationalDonors
More likely to give toevery other cause as well
More likely to engage inresearch1
Care more about howdonation will be used2
0% 20% 40% 60% 80%
Place of Worship
Local Community Orgs
Education
Health / Healthcare
Children / Youth
Funraising Orgs
Arts/Culture
Animals and Wildlife
Poverty/Social Welfare
Women's Issues
Environment
Econ Develmnt / Ent Non-InternationalDonors
DonateInternationally
1. % responding that they researched any gift they made in 2009. 2. % responding 5 or 6 on a 1-6 scale, where 6 = I pay extremely close attention to
C. ENGAGEMENT
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The 18% that donated to Economic Development /Supporting Entrepreneurs were even more engaged
D. DONORS SUPPORTING INTERNATIONAL ENTREPRENEURSHIP
53%
44%
32%
0%
10%
20%
30%
40%
50%
60%
Donate Int'l -Entrepreneurship
Donate Int'l - All Non-InternationalDonors
Even more likely to engagein research
% People ThatResearch
% People in HighImpact Segment
35%
26%
12%
0%
10%
20%
30%
40%
Donate Int'l -Entrepreneurship
Donate Int'l - All Non-InternationalDonors
And even more likely to be in theHigh Impact segment1
1. See appendix for full detail on segment breakouts
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... And care a bit more about the organizationseffectiveness and how their money will be used
D. DONORS SUPPORTING INTERNATIONAL ENTREPRENEURSHIP
86%83%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
DonateInternationally -Entrepreneurship
DonateInternationally -
All
% of Costs to Overhead Organizations Effectiveness
69% 70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
DonateInternationally -Entrepreneurship
DonateInternationally -
All
% Respondents that pay significant attention to:1
84%
78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
DonateInternationally -Entrepreneurship
DonateInternationally -
All
How Donation Will Be Used
1. % responding 5 or 6 on a 1-6 scale, where 6 = I pay extremely close attention to
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Those that support international entrepreneurship arealso less focused on transient reasons for global giving
54%
33%
27%
23%
22%
19%
19%
6%
5%
0% 20% 40% 60%
Respond to Natural Disaster
Other Reasons (Happen to be Int'l)
My Issues Affect Those Outside US
Learned About Issues Abroad ThruTrusted Source
Dollar Goes Further in DevelopingWorld
Biggest Social Needs are Abroad
Saw Challenges Thru Travels
Most Innovative Ideas Abroad
US Orgs Receive Their Fair Share
Why People Gave Internationally Overall
1. Respondents allowed to select up to three options
D. DONORS SUPPORTING INTERNATIONAL ENTREPRENEURSHIP
37%
34%
34%
23%
34%
32%
26%
16%
7%
0% 20% 40% 60%
Respond to Natural Disaster
Other Reasons (Happen to be Int'l)
My Issues Affect Those Outside US
Learned About Issues Abroad ThruTrusted Source
Dollar Goes Further in DevelopingWorld
Biggest Social Needs are Abroad
Saw Challenges Thru Travels
Most Innovative Ideas Abroad
US Orgs Receive Their Fair Share
Why People Gave Internationally Support Econ Dev / Entrepreneurship
More Important SameLess Important
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Those who currently donate abroad are willing toincrease their donations more than the average donor
% Donors
22%
% Donations1
xx%
12%
17%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Int'l Donors All Respondents
37%
34%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Int'l Donors All Respondents
$1,850
$1,650
$0
$400
$800
$1,200
$1,600
$2,000
$2,400
Int'l Donors All Respondents
Intl Donors are MoreLoyal with Current Gifts
But, Are More Willing toDonate New $
...And Those Willing to DoSo Would Give More
% Current DonationsWilling to Switch
% Willing to IncreaseTotal Donations
Avg. New Headroom /HH
E. MARKET OPPORTUNITY
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People that have invested in developing countries aremore interested in impact investing than average
49%
44% 43%41%
46%
35% 34%32%
0%
10%
20%
30%
40%
50%
60%
Investment withSocial Bonus
Business SolutionSocial Issue
Helping OthersHelp Themselves
SustainableCharity
And also show moreoverall interest
Developing world investors are more interested ineach of the four impact investing concepts1
Developing World Investors
All Investors
15%
42%
10%
36%
0%
10%
20%
30%
40%
50%
Very Interested Want to LearnMore
F. INTERNATIONAL INVESTOR INTEREST IN IM PACT INVEST ING
1. % responding 5 or 6 on a 1-6 scale, where 6 = I am very interested in
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People that have invested in developing countries aremore likely to be impact investors, and to invest in
impact investments in the future
% Donors
22%
% Donations1
xx%
19%
12%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Int'l Investors All Respondents
$26
$21
$0
$5
$10
$15
$20
$25
$30
Int'l Investors All Respondents
$15
$12
$0
$5
$10
$15
$20
$25
$30
Int'l Investors All Respondents
Higher % have ever madean impact investment
They have made largerinvestments / HH
And they are willing toinvest 25% more / HH
% EverMaking I.I.
Avg. investment/ HH ($000)
Avg. Headroom/ HH ($000)
F. INTERNATIONAL INVESTOR INTEREST IN IM PACT INVEST ING
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The 28% that invested in Economic Development/Entrepreneurship/Microfinance are more interested in
impact investing
F. INTERNATIONAL INVESTOR INTEREST IN IM PACT INVEST ING
They are more interested inimpact investing
And are interested in investing moremoney in these opportunities
24%
49%
15%
42%
10%
36%
0%
10%
20%
30%
40%
50%
Very Interested Interested and Want toLearn More
Developing World Investor Econ Dev
Developing World Investor
Other Investor
$20
$15
$12
$0
$5
$10
$15
$20
$25
Dev WorldInvestor - Econ
Dev
Dev WorldInvestor - All
All Respondents
Avg. MarketOpportunity/ HH ($000)
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The top barriers for international giving are hard toovercome
Why People Dont Give More Internationally1
64%
60%
44%
27%
23%
16%
8%
4%
0% 25% 50% 75%
Local Issues Should be Solved First
Possibilty of Corruption/Fraud
No Personal Connection
Limited Info on Int'l Charities
People Don't know Where to Begin
Int'l Orgs Don't Use $ as Effectively
People not Interested in New Charities
Int'l Charities Ask for $ Less Often
1. People allowed to select up to three options
G. BARRIERS FOR INTER NATIONAL GIVING
Virtually all respondents stated thatat least one of the top three barriers
were important to them
Each is hard to overcome: Local Issues Should be Solved First is
a philosophical belief many hold dear
Possibility of corruption is a belief withmerit, and it will take time to changethe reality and the perception
No personal connection can beaddressed (see Kiva), but requires a lotof work by each nonprofit
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Recommendations for organizations working outsidethe United States
1. Overall, focus on recommendations for charitable donations and impact investing overall While international donors/investors more engaged, general behaviors not dramatically different The international angle is not the driving motivation for most international donors or investors
2. Proactively provide additional information to donors on performance and impact International donors are more engaged, and use information more frequently than others Looking for performance and information on efficiency, effectiveness, how use $$, and few solicitations More concentrated in the high impact segment International donors still use information to validate donations, not to choose organizations
3. For donors, focus on the 30% that already give internationally Only have ~10% of the share of wallet of international donors today (30% donors, 4% total giving) They are already over the international hurdle, and those barriers are hard to overcome
4. For investors, focus on the 35% who already invest in the developing world People already over the international hurdle; just have to deal with impact investing hurdles Demonstrate higher headroom for future growth
5. Structure products and marketing to address top barriers to investing in developing countries Perceived riskiness and difficulty evaluating investments opportunities are items that can be addressed
25
SUPPORTING ORGANIZAT IONS WORKING OUTS IDE THE UNITE D STATES
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Agenda
26
1. Summary of Findings and Recommendations from Main Report p 4 62. Supporting Organizations Operating Outside the US p x y3. Appendix p 27 283. Appendix: Segments p 27 30
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International donors are much more likely to be in theHigh Impact segment
28
APPENDIX
% DONORS OVERALL US
POPULATION1
% DONORS DONATE
INTERNATIONALLY
% DONORS DONATE INTL
ENTREPRENEURSHIP2
Repayer 23% 18% 17%
Casual Giver 18% 18% 12%
High Impact 16% 26% 35%
Faith Based 16% 18% 18%
See the Difference 14% 10% 5%
Personal Ties 13% 11% 13%
1. Refers to the population we tested: US households with over $80,000 in annual household income. They comprise the wealthiest 30% of US householdsand account for 75% of individual donations to charity each year. 2 Refers to the people who donated internationally AND said they supportedentrepreneurship, economic development, or microfinance with those international donations
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There are six segments of impact investors
29
APPENDIX
Skeptic
I keep my charitablegiving and financial
investments separate.Im not at all interested
Hassle Free
If I dont have to looktoo hard and its a
pretty liquid investment,Im willing to try
Quality Organization
Show me a strongbusiness model and a
good track record, and
Ill invest
PersonallyRecommended
A business schoolclassmate is a social
entrepreneur. Imhappy to invest in his
venture
Socially Focused
This is a great way tosupport the causes that
are important to me
Safety First
I want to know Ill getmy money back andmaybe some upside.
The social benefits aresecondary
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Those that invest in developing countries are morelikely to be in the Socially Focused segment and less
likely to be Skeptics
30
% INVESTORS OVERALL US
POPULATION1
% INVESTORS INVEST IN DEV
COUNTRIES
% INVESTORS INVEST IN DEVCOUNTRIES +
ENTREPRENEURSHIP2
Safety First 29% 23% 23%
Socially Focused 27% 32% 39%
Quality Organization 19% 23% 23%
Hassle Free 6% 8% 7%
Personally Rec. 5% 5% 5%
Skeptic 13% 9% 4%
APPENDIX
1. Refers to the population we tested: US households with over $80,000 in annual household income. They comprise the wealthiest 30% of US householdsand account for 75% of individual donations to charity each year. 2 Refers to the people who invested in developing countries AND said they supportedentrepreneurship, economic development, or microfinance with those investments