markets for good presented by liquidnet for good
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PRESENTED BY
© 2011 Liquidnet Holdings, Inc. © 2011 Liquidnet Holdings, Inc.
How might we influence
the flow of capital to
reach the organizations
doing the most good?
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© 2011 Liquidnet Holdings, Inc. © 2011 Liquidnet Holdings, Inc.
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© 2011 Liquidnet Holdings, Inc.
How might we make it easier
and cheaper for nonprofits
to raise money?
CHALLENGE:
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© 2011 Liquidnet Holdings, Inc.
How might we make it easier
for donors to find effective
nonprofits to donate to?
CHALLENGE:
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© 2011 Liquidnet Holdings, Inc.
How might we ensure that
higher-performing nonprofits
are receiving enough donations
so that they can effectively
meet their mission?
CHALLENGE:
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© 2011 Liquidnet Holdings, Inc.
How might we take the field of
impact investing to scale?
CHALLENGE:
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© 2011 Liquidnet Holdings, Inc.
How might we use the tools of
impact investing and
philanthropy to generate more
social impact?
CHALLENGE:
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© 2011 Liquidnet Holdings, Inc.
THE SPECTRUM OF MARKETS
FINANCIAL CAPITAL MARKETS
Financial Return
Financial Performance Measurement
• Debt
• Equity
• Retail (mutual funds, online brokers)
• Institutional (Exchanges, Alternative
Trading Systems)
About 5%
FINANCIAL
CAPITAL
MARKETS
$50 Trillion
SOCIALLY
RESPONSIBLE
INVESTING
Social Screening and
Shareholder Advocacy
$7 Trillion
RETURN
MEASUREMENT
PLATFORMS
INVESTMENT
TYPE
AVERAGE
TRANSACTION
COST
MARKET SIZE
IMPACT INVESTING MARKETS
Financial + Social Return
Financial + Social Measurement
• Debt
• Equity
• Grants
• Retail (online micro finance)
• Institutional (Impact Funds,
emerging platforms)
About 20%*
$50 Billion
PHILANTHROPY (GIVING MARKETS)
Social Return
Social Performance Measurement
• Grants
• Debt
• Retail (offline channels, online
giving, Donor Advised Funds)
• Institutional (Foundations)
About 30%
$300 Billion
MARKETS FOR GOOD
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© 2011 Liquidnet Holdings, Inc.
Source: 1. Figures come from the Foundation Center, the Urban Institute, the IRS, and other sources, via Disrupting Philanthropy: Technology and the Future of the
Social Sector, by Lucy Bernholz with Edward Skloot and Barry Varela
FACTS ABOUT PHILANTHROPY
9
In general, most giving comes from many donors,
but goes to relatively few nonprofits.
How might we provide
tools for individuals to
give more effectively?
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© 2011 Liquidnet Holdings, Inc.
FACTS ABOUT PHILANTHROPY
10
In general, most giving comes from many donors,
but goes to relatively few nonprofits.
Source: Giving USA Foundation (2007) Sources: Foundation Center, Slate, via Disrupting Philanthropy: Technology
and the Future of the Social Sector, by Lucy Bernholz with Edward Skloot
and Barry Varela
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© 2011 Liquidnet Holdings, Inc.
FACTS ABOUT PHILANTHROPY
11
In general, most giving comes from many donors,
but goes to relatively few nonprofits.
How might we provide
sufficient information
about all nonprofits?
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© 2011 Liquidnet Holdings, Inc.
FACTS ABOUT PHILANTHROPY
12
In general, most giving comes from many donors,
but goes to relatively few nonprofits.
Source: Giving USA Foundation (2007) Sources: Foundation Center, Slate, via Disrupting Philanthropy: Technology
and the Future of the Social Sector, by Lucy Bernholz with Edward Skloot
and Barry Varela
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© 2011 Liquidnet Holdings, Inc.
UNDERSTANDING DONORS
If we understand the various motivations driving donors,
we can more fully engage them in social investing.
Source: Hope Consulting, Money for Good: The US Market for Impact Investments and Charitable Gifts from Individual Donors and Investors, May 2010
How might we reach all
donors, regardless of the
reasons why they give?
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© 2011 Liquidnet Holdings, Inc.
UNDERSTANDING DONORS
While donors say they care about nonprofit performance,
very few actively donate to the highest-performing nonprofits.
How might we get people to
act on their interest in
nonprofit performance by
doing some research?
How might we get people
to care about social
impact and other measures
of performance?
How might we get people to
give to the top nonprofits,
not just those that are
„good enough‟?
Source: Hope Consulting,
Money for Good: The US Market
for Impact Investments and
Charitable Gifts from Individual
Donors and Investors, May 2010
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© 2011 Liquidnet Holdings, Inc.
TOMORROW: GIVING MARKETS
To ensure that funding goes to the highest-performing nonprofits,
traditional donors will need to become social investors.
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© 2011 Liquidnet Holdings, Inc.
TODAY: PHILANTHROPY
Today, we do not have enough readily available, reliable, and
universal information to support the philanthropic ecosystem—the giving markets.
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© 2011 Liquidnet Holdings, Inc.
TOMORROW: GIVING MARKETS
With enough demand from donors and sufficient supply of information about nonprofits, we might transform the
philanthropic ecosystem into giving markets.
TRANSACTION PLATFORM FOR INFORMATION & INVESTING
“We are able to see the impact
of our investments in society,
leading us to donate more
money to higher performing
nonprofits”
“We have tools to easily measure,
manage and report our
organization’s performance. We
also have the tools to connect with
and engage our donors. This allows
us to have more social impact and
efficiently attract more funding to
continue to do so.”
“Our needs are being met and
we have a voice and a
mechanism to give feedback.”
The nonprofit sector will have
sufficient information about
nonprofit organizations and their
performance, aggregated and
freely flowing in a
standardized and accessible
format.
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© 2011 Liquidnet Holdings, Inc.
TOMORROW: GIVING MARKETS
18
A vision of how some components of a giving markets platform might correspond to the best practices �of a
successful retail market, providing a range of information to connect buyers and sellers.
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© 2011 Liquidnet Holdings, Inc.
EXISTING EXAMPLES:
EXISTING EXAMPLES:
TOMORROW: GIVING MARKETS
19
A vision of how some components of a giving markets platform might correspond to the best practices �of a
successful retail market, providing a range of information to connect buyers and sellers.
Easy-to-use financial
transaction functionality
provides a safe, reliable
and efficient way to take
action and donate.
Seamless integration
with social media, which
builds on existing
relationships and
networks
Ability to search, browse,
or select organizations
in a variety of ways, to
make it easier for
donors to find effective
nonprofits to donate to.
Objective information
about the nonprofit, their
theory of change, and
why they need funding.
Additional multimedia
helps tell the nonprofit‟s
story and connect with
their donors.
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© 2011 Liquidnet Holdings, Inc.
TOMORROW: GIVING MARKETS
20
A vision of how some components of a giving markets platform might correspond to the best practices �of a
successful retail market, providing a range of information to connect buyers and sellers.
Information about how
others behaved, based
on powerful sales
analytics, offers insight
into important market
dynamics.
Standardized data about
the nonprofit allows
comparison across
organizations.
EXISTING EXAMPLES:
Expert reviews, “seals of
approval,” and deep
analysis of performance
inform donation
decisions.
EXISTING EXAMPLES:
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© 2011 Liquidnet Holdings, Inc.
TOMORROW: GIVING MARKETS
21
A vision of how some components of a giving markets platform might correspond to the best practices �of a
successful retail market, providing a range of information to connect buyers and sellers.
Clear and simple visual
rating system to quickly
indicate nonprofit
performance.
EXISTING EXAMPLES:
EXISTING EXAMPLES:
Reviews from
beneficiaries, volunteers,
and other donors allow
for transparent
feedback.
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© 2011 Liquidnet Holdings, Inc.
TOMORROW: GIVING MARKETS
22
A vision of how some components of a giving markets platform might correspond to the best practices �of a
successful retail market, providing a range of information to connect buyers and sellers.
Organizations are
intuitively categorized,
making them easier to
search.
EXISTING EXAMPLES: