what funding model for social business?

finance + social business + web 2.0

What funding model for Social Business?

April 11, 2011

SUNII

About the contributors

Under the initiative of danone.communities, Accentu re and HEC Social Business chair conducted a survey on Social Business funding model sdanone.communities is an incubator for social enterprises, born at the initiative of Professor Muhammad Yunus and Danone. Its mission is to promote, support and fund social business, responding to questions from malnutrition and poverty…

Accenture is a global management consulting, technology services and outsourcing company, with more than 215,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments.

HEC Social Business chair develops action research and quality research on strategic innovation in societal fields and offers a teaching program examining Social Business themes and studying the involvement of business in the fight against poverty. The chair is co-presided by Pr. Muhammad Yunus and Mr. Martin Hirsch and receives the financial support of Danone, Schneider Electric, the French government (DGCS) and private donors.Thank you to the HEC students Markus Beck, Tine Fossland, Tyler Goin and Felix Heinrich for their valuable contributions.

Contactsdanone.communitiesdanonecommunities.com

Emmanuel MarchantChief [email protected]

Olivier MaurelSocial Innovation Animation [email protected]

Accentureaccenture.com

Michel MoulletSenior [email protected]

Frédéric [email protected]

HEC Social Business chairhec.edu/certificates/social-business

Bénédicte Faivre-TavignotExecutive [email protected]

2finance + social business + web 2.0

About the contributors

The survey has been conducted with the support of d anone.communities partners, including:


The following organizations have been interviewed: izi-collecte, FriendsClear, Groupe SOS, aiderdonner, entrepreneurs commons, Kiva, Babeldoor, MicroDon, Babyloan, Nexii Global, SUNII / Blue Green Energy, Regioneo.

SUNII

Abstract• Internet already transformed charities’ fundraising strategies and danone.communities wanted to investigate the potential to

accelerate Social Business development, by leveraging Internet’s capacity to call for crowd-funders and in the same time establish Peer-to-Peer relationships.

• We examined almost 80 websites covering P2P fundraising , sourced mostly from developed countries in America and Europe, to have a good understanding of the trends and identify emerging models. Also, we conducted interviews with danone.communities partners to share their experiences and investigate the barriers and key success factors for Social Business fundraising.

• In fact, we found more websites than we expected, allowing supporters to follow their favourite causes, offer their time, and give, lend or invest funds in non-profit organizations or specific projects. Most examples lay in the domains of charities or creativity & individuals’ projects.

• Although most websites in our sample were created over the last 3 years (65% of identified websites created over 2008-2010), with the emergence of Entrepreneurship and Creativity & Individuals’ projects, most of top 10 websites (above €8M funds raised /year) were created before 2007. Only two recently launched website reached the top 10: Kickstarter (crowdfunding portal) and Funding Circle (P2P loans).

• Overall, Social Business remains little covered.

• The gap can be explained by the complexity and the variety of funding opportunities, and probably the lack of visibility and appeal of social business projects compared to charities or creativity & individuals’ ones. To overcome these challenges, good practices of best performing websites such as innovative communication and marketing approaches could be leveraged to attract investors.

• In terms of funding model, P2P lending has been significantly developed for social business, mainly by Kiva and its numerous followers; however, it addresses only small-size projects (up to €3,000).

• Investment platforms (1 specialized in Social business) offer to fund larger projects up to €300-500,000, but this model is not economically viable for projects below 20% ROI due to high admin, due diligence and communication & marketing costs (should d.c. mutual fund be distributed beyond the current Danone employees basis, it would not cover those costs)

• This study is a first step in a larger process. It helped us design one picture of the financial landscape for Social Business and evaluate the state-of-the-art of Internet technologies in 2011. We hope it could serve other organizations. We are very open for new collaborations if others want to share ideas and concrete actions on how to finance social businesses through the web.


Online Fundraising overview

What model(s) for Social Business?

Conclusions

Appendix-Analysis of funding models-Detailed analysis of websites-Data collected

Contents


We analyzed funding models beyond platforms addressin g Social Business needs

Mapping of analyzed platforms75 websites


Help

Follow

Donate

Lend

Invest

Charities Charity projects Social entrepreneurs Entrepreneurs Creativity and Individuals

SASIX (Nexii),BVS&A (BOVESPA)

Kiva, Babyloan, Xetic, Wokai, MyC4, RangDe,

energyincommonMicroplace, Dhanax

Mission Markets

Startupschool, babelbee

Friendsclear, Fairplace, Funding Circle, Cofundit

• Wiseed, Crowdcube, Microventures, Shareposts,

CrowdaboutNow• Profounder,

• GrowVC

Axa Atout coeur, Koeo, Sparked, Volunteermatch , Idealist,

jagispourlanature.org

Jumo, Everywun, Care2, WiserEarth

• Causes (facebook), Act of Good• betterplace, bringlight, global giving

• Aiderdonner, Justgiving• izi-collecte, Network for Good

• Ebay GivingWorks, Endorse for a Cause, socialvest.us, CauseOn

• Veosearch, Mailforgood, Olozim

33needs

Dreamshake

MySpace

• Babeldoor, Ullule, Kickstarter, Kisskissbankbank, RocketHub, Pozible, IndieGoGo, Invested.in, MyFootballClub

• Fans Next Door, PledgeMusic• Jaimel’info

• Flattr

Lending Club, Prêt d’Union, Zopa, Prosper, Rate Setter, Yes-secure, Quakle

• MyMajorCompany, Sellaband, CatWalkGenius

Most websites belong to 4 categories:•Charity fundraising (22%)•Crowdfunding for Creativity and Individuals (17%)•P2P loan for Entrepreneurs or Creativity and Individuals (15%)•P2P micro-credit (7%)

Main focus

Note 1: Paid crowdsourcing platforms (innocentive, cofundos...) or open source project platforms (wikipedia, mozilla...), that could be compared to such websites as Volunteermatch, Babelbee or Dreamshake were not included.

Note 2: Social market places exist, still in a project phase: IIX Asia, BVS (Euronext Lisbon), Social Stock Exchange (London), NextSSE (Germany), PII (France); Gate

We see a large diversity and high specialization of funding platforms, per domain and per type (no all-inclusive s olution)

Volunteer recruitmentVolunteer recruitment

Startup trainings

Charity social networks

Fundraising portals General crowdfunding

Themed crowdfundingFundraising event pagesDonations mgmt tools

Shop for a cause

“Social return only”Stock markets

Community investment

P2P Micro-credit P2P loans P2P consumer credit

Private investment

Browse for a cause

Music social networks

GrowVC

Flattr

Platforms per type

Help

Follow

Donate

Lend

Invest

• Online fundraising is largely widespread, with a lot a innovative models; most of them support causes rather than projects

• Online fundraising is largely widespread, with a lot a innovative models; most of them support causes rather than projects

• Loan is the main model in entrepreneurship business (interest-free, via MFIs in social business)

• Loan is the main model in entrepreneurship business (interest-free, via MFIs in social business)

• Crowd-funding is particularly prolific with 2 (opposite) modelso Give for free/ funo Lend for (high) profit

• Crowd-funding is particularly prolific with 2 (opposite) modelso Give for free/ funo Lend for (high) profit

• We see investment models, but mostly in a starting phase

• Popularity around ‘Investment-like‘ models is actually driven by the success of MyMajorCompany

• We see investment models, but mostly in a starting phase

• Popularity around ‘Investment-like‘ models is actually driven by the success of MyMajorCompany

Charities Charity projects Social entrepreneurs Entrepreneurs Creativity and Individuals

danone.communities


P2P translation

33needs

We see an accelerated growth in Funding platforms ove r the last 3 years, driven by the emergence of new models fo r Entrepreneurs and for Creativity & Individuals

TrendsBased on 75 identified websites (non exhaustive, mostly from Western Europe and USA)

CharityCharity

Social entrepre-neurship

Social entrepre-neurship

Entrepre-neurship

Entrepre-neurship

Creativity &

Individuals

Creativity &

Individuals

~65% created in 2008-2010*

* Includes Jan & Feb 2011

Care2JustGiving

IdealistVolunteerMatch

NetworkForGoodGlobal Giving

eBayGivingWorks

MySpace

Axa Atout Coeur

SASIX

Kiva MyC4

Microplace

Zopa Prosper

Sellaband

WiserEarth

Causes (facebook)

bringlightbetterplaceVeoSearch

WokaiBabyloan

XeticEnergyincommon

Startupschool

MyMajorCompany

LendingClub

FundingCircle

RateSetter

PretdUnion

DreamShake Friendsclear

Everywun Jumo

ActofGoodaiderdonnerIzi-collect

Sparked Koeo Jagipourlanature

IndieGogoKickstarter

PledgeMusic

Babeldoor

MailforGoodOlozim

GrowVCWiseed

CauseOnEndorseforacauseSocialvest.us

MissionMarkets

CatwalkGenius

Kisskissbankbank UlulePozibleRocketHub

Fansnextdoor Flattr

Fairplace Cofundit

ProfounderCrowdcube

CrowaboutNow

Invested.in

Help Follow Donate Lend Invest

Shop/ browse for a cause

P2P micro-credit

Fundraising portals / event pages

Private investment/ community investment

/ investment club

Crowdfunding

MicroVentures

8

Quakle

Yes-Secure

8

P2P consumer credit

MyFootbalClub

Despite an early start, we don’t see strong development trends in

Social entrepreneurship

Despite an early start, we don’t see strong development trends in

Social entrepreneurship

Dhanax

RangDe

Shareposts


BVS&A

33needs

Still, 9 of the top 10 websites were created before 2007 and #1 & 2 were created in the early 2000’s

Top 10 websites

Charity

#1 JustGiving: €100M /yoFundraising event pageso€840M since 2000

#2 Network for Good*: €100M /yoDonations mgmt tools/ portalo€372M since 2001

#5 EbayGivingWorks: €38M /yoShop for a causeo€154M since 2007

#10 Causes (facebook): €8M /yoCharity social networkso€23M since 2007o140M members

Entrepreneurship (incl. Social)

#7 Kiva: €29M /yo€146M since 2005o260,000 projects funded

#9 Funding Circle: €11M /yo€11M since 2010

Creativity and Individuals

#3 LendingClub: €100M /yo€169M since 2007o22,000 projects funded

#4 Prosper: €100M /yo€168M since 2006o34,000 projects funded

#6 Zopa: €70M /yo€120M since 2005o20,000 projects funded

#8 KickStarter: €19M /yo€29M since 2009o6,500 projects funded

�� What new models to accelerate the funding and devel opment of Social Business?�� Which existing models can be replicated / adapted t o address Social Business funding needs?

None of Kiva’s followers could replicate its success

(closest follower is 10 x smaller)

No significant alternative to P2P micro-credit was invented social

business

Funding Circle is a recent lending website, focusing on business loans

None of Kiva’s followers could replicate its success

(closest follower is 10 x smaller)

No significant alternative to P2P micro-credit was invented social

business

Funding Circle is a recent lending website, focusing on business loans

Lending website dominate this category; Lending Club & Prosper actually make 10-15% of loans to

entrepreneurs (i.e. More than Funding Circle)

Recently launched KickStarter is emerging quickly

Lending website dominate this category; Lending Club & Prosper actually make 10-15% of loans to

entrepreneurs (i.e. More than Funding Circle)

Recently launched KickStarter is emerging quickly

Half of top 10 websites are donation models, in the charity category

Half of top 10 websites are donation models, in the charity category

* Network for Good manages fundraising transactions; funds raised are a consolidation of funds actually raised by charity websites.9finance + social business + web 2.0



Conclusions


Contents


To fill the gap in Social Business fundraising, the selected model will need to address specific challenges

Challenges for Social business fundraising

Lack of visibility

• Lack of understanding of what Social Business is• High share of voice of charities: strong communication

means and fundraising strategies, with clearly stated impacts

Complexity

Lack of appeal?

• Educate on “impact investment” and “social return” as an objective and benefit, not just a selection criteria.

• Very diverse forms of businesses/ projects, from small and informal individual entrepreneurship (e.g. in need for additional

livestock) to larger businesses (e.g. aiming at investing in new machines or facilities)

• Lack of illustrative successes (e.g. Public Enemy by Sellaband)

• Difficulty for entrepreneurs to explain and promote their need and the benefits from collected funds (limited access to technology)

• Increase trust of potential investors in the relevance of projects and in the use of funds, potentially through a trusted non-profit organization, or a certification of the project selection process.

• Communicate on exemplary successes, promote social impacts around and beyond the project itself.

• Help each entrepreneurs build trust and envy on their name

�� Potential paths for improvement

�� Beyond the type of model, the communication and mar keting approach will be key to develop fundraising for Social Business


Limitations to tax exemptions

• Most funding opportunities available on platforms are located in emerging countries and are not eligible to tax exemptions

• There is no organization similar to Red Cross with local offices that are granted tax exempt status

• Leverage existing local structures with tax exempt status to fund projects abroad

• Opportunity to build an international network of local structures

Most high performers differentiate themselves with in novative communication and marketing approaches to attract in vestors

Good practices

High performers

(Donate)Just GivingKickStarterCauses (facebook app)

• Leveraging communities (family / friends / co-workers) is very powerful and allows to defer marketing costs toyour best supporters,

o They directly mobilize their networkso It increases trust in the cause/ project

• Kickstarter (and copycats) opens new ways to address the new generation of funders (ability to raise funds with an appealing approach and with projects in connection with personal interests)

(Lend)Kiva

NB: all other models have a limited international potential because they rely on local credit licences (or local agreements with banks)

• Sourcing projects is important to maintain funders’ interest (a large number of projects allows to segment funding opportunities and better address funders expectations)

• ... but proper qualification is key: Kiva leverages local partners, which are rated as well• Besides, this network of partners is necessary to scale up the model.

(Invest)MyMajorCompanyGrowVCCrowdCube

• MMC (see Profounder is entrepreneurship) built a model to share success (revenues or ‘net revenues’) with less legal/ financial/ compliance constraints

• GrowVC offers an “Investment club” approach (1 common fund with democratic allocation process), with an innovative profit sharing mechanism, linking funders dividends to individual votes.

• CrowdCube is the first example of fully online marketplace open to non accredited investors; they chose a ‘crowdfunding’ approach (website similar to Kickstarter) to attract investors

�� Most of these approaches can apply to all types of funding model


All types of models can apply to Social Business, d epending on the amount of the investment, its horizon and the e xpected ROI

Addressable types of projectsModels Pros Cons Fit with Social business projects

Donate • Untapped in countries such as France – huge potential

• Relevant to least advanced projects or individuals most in need: lower pressure

• Sustainability – reliance on economic trends

• Reduces value of fund provided –lack of incentive/ accountability

• Does not induce changes (relief only) “dependency” – inequality

• Lack of return

• Adapted to very long term projects/ with no return / early development starter

• Opportunity to rely on donations to invest in shared infrastructures benefiting to social businesses

Lend • Incentive to build for the future• Attractive (reversible donation)• Circulation of money – multiplication

effect• Lower reliance on economic trends

(effects on new funds collection rather than loans stock)

• Risk on pay back for both the supporter & entrepreneur

• Charge of interests implies short and medium term investments only (risk/ cost too high beyond 3 years)

• Costs of credit scoring

• Addresses only projects with a return (or at least payback) within 12-36 months

Invest • Attractive (profit)• Ability / potential to raise more money

per project• Lower/ positive reliance on economic

trends (especially if low liquidity)

• Profits out of the country (less local impact)

• Illiquidity (for the investor)• Due diligence and administrative

costs• Governance shared with funders: risk

to impact the project DNA/ weaken the project

• Addresses only projects with a return within 12-36 months and beyond

• Amounts raised should be higher to absorb costs of collection and admin/ mgmt costs

NB: The choice of a model also strongly depends on the definition of an Investment Philosophy (i.e. the overall set of principles or strategies that guide the investor)


While donation and lending models allow to fund sma ll to mid-sized projects, only investment models allow to fund larger projects (but never as large as d.c projects)

Fundraising capacitiesSample of 40 websites

Funds raised per year

Funds raised per project(per year for causes)

€100M -

€10M -

€1M -

€0.1M -

0 300,000100,00030,00010,0003,0001,000

JustGivingNetworkForGood

Global Giving

eBayGivingWorks

SASIX

Kiva

MyC4

Zopa

Prosper

Sellaband

Causes (facebook)

betterplace

VeoSearch

Wokai

Babyloan

Energyincommon

MyMajorCompany

LendingClub

FundingCircleRateSetter

Friendsclear

aiderdonnerIzi-collect

IndieGogo

Kickstarter

PledgeMusic

Babeldoor

MailforGood Olozim

GrowVC

Wiseed

KisskissbankbankUlule

Pozible

RocketHub

FansnextdoorFlattr

Profounder

Yes-SecureMyFootballClub

Donate

Lend

Invest

Charity

Social Entrepreneurship


Entrepreneurship

25,000

Amounts raised include annual

membership fees

Amounts raised include annual

membership fees

Community investment (including ‘investment-like

models’ such as MMC) models allow to raise €25-

100,000 per projectIt also includes Crowdcube

Community investment (including ‘investment-like

models’ such as MMC) models allow to raise €25-

100,000 per projectIt also includes Crowdcube

MissionMarkets*

1,000,000

A few (recent) private investment platforms , reserved to accredited investors, allow to fund

larger projectsIt also includes MicroVentures

or Shareposts

A few (recent) private investment platforms , reserved to accredited investors, allow to fund

larger projectsIt also includes MicroVentures

or Shareposts

Crowdfunding models allow to fund €2-5,000-

projects

Crowdfunding models allow to fund €2-5,000-

projects

P2P consumer credit is very popular and allows to raise €5-

8,000

P2P consumer credit is very popular and allows to raise €5-

8,000

Most P2P micro-credit models allow to collect

limited funds per project(€300-2,000)

Most P2P micro-credit models allow to collect

limited funds per project(€300-2,000)

danone.communities

* MissionMarkets raised equity for 2 social enterprises (Feb 2011): Lumni, a fund that invest in the education of diversified pools of students, raised $50,000. HotFrog, an online media portal that has yet to launch, raised $25,000

Max (variable)

In most countries, private placement is limited: it must be

public beyond €100,000 in France, it

is reserved to accredited investors above $1M and must

be public beyond $5M in the USA

Xetic


Given average contributions per supporters, a project nee ds to attract 24 times more donators or 4 times more lende rs than investors to be funded

Fundraising capacitiesContribution per supporter

DonateAiderdonnerNetworkforgoodAvon Walk*

Olozim

Ulule, Babeldoor, Kickstarter

Xetic, Babyloan, Kiva

Prosper, RateSetterLend

Invest

€0.5 – browse/ shop for a cause

€40-70 euros – crowdfunding

€30-100 – causes fund raising

€50-170 – micro credit

€600 – business credit

€200 – consumer credit

FriendsClear

€40 euros – community investment/ Creativity and Ind ividuals

€400-700 euros – community investment/ Business

€2,000 euros – investment club

>€50k euros – Private equity

* Not P2P Internet fundraising

MyMajorCompany

Wiseed (Regioneo), Profounder

GrowVC (accredited investors)Mission markets (accredited investors, min. 50k)

~€50

~€300

~€1,200

x24

x4

Estimate sources


In the investment model, the funded project should y ield return of ~20% to cover collection costs, vs. only ~5% in l oans and no return required in donations

Costs of collectionas a % of funds collected

Donations Micro-creditLoans

P2PLoans

Investment

€10-€25,000 /project

€300-€2,000 /project

1-2% -payment mgmt

€5,000-€35,000 /project

1-2% 1-2%- payment mgmt - payment mgmt- bank/ licence fee

€25,000-€5M /project

1-2%4-8%

• Payment management costs vary depending on the payment means (from ~1% with credit card to ~2% with Paypal)

• Platform funding costs include website management, but also communication and marketing costs, screening of projects (especially for crowdfunding platforms)

• Kiva reduces payment management cost to zero thanks to a special agreement with Paypal which bears the cost of Paypal and credit card transactions.

• Amounts charged by platforms to fund their operating costs reach ~5% (due to the low amounts raised per collection)

• In most cases, platforms rely on banks , which charge ~1-2%; alternatively, some players obtain their own credit licence to reduce that cost

• Operating costs % is limited thanks to higher average loan size and with attractive interest rates (for lenders and for borrowers rejected by banks)

• Management fees include the administration of the investment structure; it is very dependent on the investment size

• Operating costs cover due diligence and communication/ marketing costs

- platform operating costs4-6%3-4% - platform operating costs- platform operating costs2-4%

1%

95% 94%

- payment mgmt

- mgmt fee (fixed costs)

80%95%

- platform operating costs10-15%

Notes:•Fiscal positive impacts are not included, as they are actually already integrated in funders’ expectations•Depending on the website, costs of collection can be carried either by the entrepreneur (not 100% of funds transferred, or interests charged), or by the funder (e.g. via suggested or minimum donation to the platform)




Conclusions


Contents


Key outcomes

• There is no single answer to address Social Business funding needs and the diversity of models (especially from a marketing perspective) is key to maximize the flows of funding to Social Business: donation, lending and investment models may fit different projects, depending of their size, maturity, entrepreneur objectives... but also to the funder “investment philosophy”: principles, return expectation...

• New models are being invented to allow investments in Social Business or more generally in Entrepreneurs’ projects, but financial, fiscal and legal constraints remain strong (limitations in total investment, to accredited investors, to local entrepreneurs and/ or investors...); Social stock exchange projects are complex and still require time to go live (existing such platforms are actually donations with social returns only)

• Evolutions in regulations may be required to truly accelerate the emergence of P2P funding models, for instance exempt securities offerings with €100 maximum per investor from registration, or soften rules for tax exemptions for Social Business

• While diversity is key, structuring of the sector could help social entrepreneurs make their voice(s) heard, support cross-border funding, or maybe provide common and cheaper financial means (e.g. payment means)

• Besides, there is a need to educate and inform on Social business on the funders’ side, to raise awareness and sensitivity to this cause. Although initiatives already exist (social entrepreneurs associations, general information websites...) and awareness will actually raise progressively word of mouth spreads the concept.

• This study is a first step in a larger process . It helped us design one picture of the financial landscape for Social Business and evaluate the state-of-the-art of Internet technologies in 2011. We hope it could serve other organizations. We are very open for new collaborations if others want to share ideas and concrete actions on how to finance social businesses through the web.




Conclusions


Contents


HelpExisting solutions & trends

• There is no identified example in social business of website facilitating the provision of skills by individuals to projects.• Examples go from a consolidation of calls for help from non-profit organizations (Axaatoutcoeur), to an offering of education

by a community of volunteers in a virtual academy (startupscholl as an example of SuperCoolSchool) and to a market place intermediating entrepreneurs with needs and individuals with skills (dreamshake).

Website Creation Language Members Specificities

Charities

Volunteers recruitment

IdealistVolunteermatchSparked

199519982008

En, Sp, CaEnEn

1M2.5M

150,000

Allows volunteers to support non profits with skills on local and national as well as international levelsUsing books and fairs to create awareness

jagispourlanature.org 2006 Fr n.a. Connects volunteers and organization to offer environmental volunteering possibilities in France (1h up to >6 months)

Axa Atout Coeur 2009 Fr 15,000 Allows AXA Group employees to volunteer to support events organized by associations (Axa Atout Coeur created in 1991)

Tools for calls for volunteers

Koeo 2008 Fr n.a. Platform for charities and companies to offer and receive donation of professional skills

Entrepreneurs

Startup support

StartupSchool 2009 En 21,000 entrepreneurs

A marketplace to schedule meetings, talks and classes as well as a virtual Classroom to meet live and interact via chatting, audio and video conferences in order to share, screens


Calls for volunteers

Dreamshake 2008 Fr 15,000 Market place to connect dreams & projects to needed/ proposed skills


HelpFunctional coverage

• Supporters post their profile and propose their skills to project owners, or respond to projects needs posted on the platform

• They offer a volunteer pool including professional skills, time, in kind donations to either the platform or to a specific project (P2P)

• The platform communicates the need of volunteers, providing the possibility to find adequate volunteering (e.g. Sparked Micro volunteering for people with a time constraints)

• Supporters post their profile and propose their skills to project owners, or respond to projects needs posted on the platform

• They offer a volunteer pool including professional skills, time, in kind donations to either the platform or to a specific project (P2P)

• The platform communicates the need of volunteers, providing the possibility to find adequate volunteering (e.g. Sparked Micro volunteering for people with a time constraints)

1

• Supporters actually provide their time or services• Supporters actually provide their time or services3

• The platforms provides a tool for project owners to publish their project and define their needs, facilitating projects and nonprofits with a communication channel and systemic ways to find these volunteers more effectively

• The platforms provides a tool for project owners to publish their project and define their needs, facilitating projects and nonprofits with a communication channel and systemic ways to find these volunteers more effectively

2

T2T1 Supporters

Platform

Projects

1

2

3


HelpEvaluation

Fit with Social

Business

Ability to reach

supporters

Technical capabilities

• Helps create a sustainable community of supporters around a project

• Adapted to project launch phase (e.g. review business plan, design website, translate documents), rather than recurring activities (contrary to charities)

• Constraints to match volunteers and projects across borders; all identified platforms are national (except startupschool) or even local

• Platforms allow projects and supporters to post time/ skill needs or proposals

• Databases can be searched to facilitate matching• Koeo offers a white label platform (in french) to companies, giving the opportunity to their employees to

support an organization, organizations in a selected domain, or all organizations enrolled in Koeo (environment, education...)


FollowExisting solutions & trends

Model Creation Language Members Specificities

Charities

Themed social networks

Care2 1998 En 15M 100% of administrative costs ad financed, credits system, earned via volunteering, petition…, and distributed on favourite causes (funded by corporate sponsors)

WiserEarth 2007 En, Fr, Spa, Port 45,000 NGO directory of more than 112,000 organizations worldwide

Everywun 2008 En n/a Allows to spend money by using virtual credits – website down since end of 2009

Jumo 2010 En n/a Online network service “for the social sector” closely linked to Facebook



MySpace 2003 15 languages 100M Recommendations engine, recommending users profiles they might like based on their browsing history

• Models in this category are themed social networks , allowing to follow your favourite causes and NGOs and get in touch with people supporting the same causes; there is no example in social business

• Rather than giving money, some of them (Care2, Everywun) provide opportunities to act, and thus earn and redistribute credits to causes (funded by advertising)

• Growth parallel with Facebook (creation in 2004 – boomed in 2005-6…)

• Although the platforms are mainly focused on causes, there is a huge leverage of network members to friends on the network, as most of them allow Facebook connect and publish activity on the profile


FollowFunctional coverage

Supporters

Platform

Projects

• Allows organisations to have a presence on the platform to more easily connect to supporters• They can develop networks of fellow concerned supporters or with organizations

• Allows organisations to have a presence on the platform to more easily connect to supporters• They can develop networks of fellow concerned supporters or with organizations

1

• Supporters connect to the social network to keep track of the causes or interests they care about• As a result of the platform, supporters and projects can be directly connected (in some cases you

can give donations via the platform (e.g. Jumo)

• Supporters connect to the social network to keep track of the causes or interests they care about• As a result of the platform, supporters and projects can be directly connected (in some cases you

can give donations via the platform (e.g. Jumo)

2

T1

2

1


FollowEvaluation

Fit with Social

Business

Ability to reach

supporters


• Allows to lead a network of ambassadors/ promoters of a project, to find new clients/ contributors/ funders (cf. Regioneo example)

• Follow model better suited to large causes, having the ability to gather tens/ hundreds of followers (social business not being a cause itself)

• Not much benefits at a project level (for most projects)

• No limitations to internationalization

• Can be a gateway to future donations/ financial funding by followers

• Allows to regularly publish information to a targeted audience (which opted in)


DonateExisting solutions & trends (1/2)

• Donation aroused the creation of many creative models for charities and personal projects• SASIX and BVS&A are the only donation model in Social business

Model Creation Language Funds peryear / project

Specificities

Charities


Causes (facebook)Act of Good

20072008

EnEn

€8M / €290n/a

Themed social networks allowing to donate to causes (not specific projects)

Fundraising portals

GlobalgivingBetterplaceBringlight

200220062007

EnEn, GeEn

€2.9M / €8,500€2.5M / €3,700

n/a

Fundraising portals and marketing services to nonprofits and to provide donors with the information they need to make informed donations

Fundraising event pages

Just givingAiderdonner

20002008

EnEn, Ge, Fr, Du

€105M / n/a€1-2M / €10-20k

Provide the tools for nonprofits to raise funds online

Donations mgmt tools

Network for GoodIzicollecte

20012008

EnFr

€100M€ / €6,200€1.2M / n/a

Tools consolidating the flows from multiple websites

Shop for a cause

EbayGivingWorksSocialVestEndorse for a causeCauseOn

2003200920102010

EnEnEnEn

€38M / €8,300n/an/an/a

Allows users donate to nonprofit organizations when they buy and sell through an e-commerce site

Browse for a cause

VeosearchMailforgoodOlozim

200720092008

EnFrEn

€60k / €600-4,000€10k / €550

€20k / €4,000

Provide direct marketing services (mail newsletters, ads on search sites) to collect funds later provided to charity as micro donations

Social business

BVS&ASASIX

20032004

PortEn

n/a€300k / €23k

Promotes an engaged way of giving charity-“investments”(donations) with pure social return


DonateExisting solutions & trends (2/2)


Specificities


General crowd-funding

MyFootbalClubIndiegogoKickstarterBabeldoorRockethubUlulePozible (prev. Fundbreak)KisskissbankbankInvested.in

200720082009200920102010201020102010

EnEnEnFrFr, EnFrEn (Aus)FrEn

€0.5M / €0.5M€0.4M / €2,500€19M / €4,500€110k / €2,000€200k / €2,400€180k / €2,000€110k / €2,600€190k / €6,200

n/a

P2P platforms for supporters to connects with projects, individuals, and artists to offer all-or-nothing funding via a crowd of donations.Most platforms require a reward for supporters.

Music crowd-funding

Pledge musicFansnextdoor

20092010

EnFr, En

€200k / €5,400€30k / €4,400

Micro-funding Flattr 2010 En n/a / €1-10 Provides a flat-rate platform to pay for online content where you “flattr” different projects


DonateFunctional coverage

Supporters

Platform

Projects

• On most models, supporters give small amounts or pre-assigned funds to the platform; supporters provide a network for donations where they can donate micro-donations through endorsements or their paychecks, or select one or several projects and donate a portion of needed funds

• On most models, supporters give small amounts or pre-assigned funds to the platform; supporters provide a network for donations where they can donate micro-donations through endorsements or their paychecks, or select one or several projects and donate a portion of needed funds

4

1

• Platform allocates and transfers the designated funds to projects once fully funded; raises awareness for projects• Donation management platforms offer a support function via collecting money or managing databases

• Platform allocates and transfers the designated funds to projects once fully funded; raises awareness for projects• Donation management platforms offer a support function via collecting money or managing databases

3

1

3

2

• Via the platforms, projects can reach their base with information and updates (events, projects plans, updates, or a general description of the cause)

• In Social Stock Exchanges, compliance with reporting obligations is a requirement

• Via the platforms, projects can reach their base with information and updates (events, projects plans, updates, or a general description of the cause)

• In Social Stock Exchanges, compliance with reporting obligations is a requirement

4

• Some projects provide non financial rewards• Some projects provide non financial rewards5

• Via the platforms, supporters give funds to causes, projects, nonprofits and individuals; provide the critical mass necessary to fund large projects through donations

• Raise awareness for projects

• Via the platforms, supporters give funds to causes, projects, nonprofits and individuals; provide the critical mass necessary to fund large projects through donations

• Raise awareness for projects

2

5

T2T1


DonateEvaluation

Fit with Social

Business

Ability to reach

supporters


• Relevant to least advanced projects or individuals most in need: lower pressure

• Adapted to very long term projects/ with no return / early development starter

• Opportunity to rely on donations to invest in shared infrastructures benefiting to social businesses

• Reduces value of fund provided – lack of incentive/ accountability

• Does not induce changes (relief only) “dependency”

• No limitations to internationalization

• Value proposition is clear and well known; there is a significant potential in countries such as France

• Requires the platform to implement a payment solution: “contrat VAD” with a bank (financial solution) + Electronic Payment Term (technical solution e.g. Atos or Paybox); paypal provides both solutions in 1 (with higher transaction costs)


LendExisting solutions & trends

• There are a many websites offering P2P loans to entrepreneurs, with very similar models; interest rate vary widely: from zero in social business (Kiva, Babyloan… with the exception of microplace offering up to 3% to the lender) to 4-8% (5-13% for the borrower)

• Models in social business partner with MFIs, allowing them to collect and lend worldwide.

• Other models partner with banks or obtain their own credit license (e.g. zopa in the UK); they collect and lend only in countries where licensed; in France, pretd’Union intends to receive its own license. In such models, lenders and borrowers must be in the same country.

Model Creation Language Funds per year / project

Specificities

Social Business

P2P micro credit with no interests

KivaMyC4RangDeDhanaxWokaiBabyloanXeticEnergyincommon

20052006200620072007200820102010

EnEnEn, DkEnEn, ChEn, FrEn, FrEn

€29M / €290€3M / €2,000

n/an/a

€290k / €450€700k / €300€40k / €330€20k / €70

Providing P2PNo interest ratesWorking together with MFIs

... with interest rates Microplace 2006 En n/a P2P, through MFIs

Entrepreneurs

P2P loans Friendsclear FamilyFriendsclear ProFunding CircleFairplaceCofundit

20082010201020102010

FrFrEnBrEn

€200k / €1,500€300k / €10k

€11M / €35,400n/a

n/a / €200,000

P2P Lending to Entrepreneurs including interest model


P2P consumer credit

ZopaProsperLending ClubQuakleRate SetterYes-SecurePrêt d’Union

200520062007200820102010

not started

EnEnEnEnEnFr

€70M / €6,000€100M / €5,000€100M / €7,700

n/a€7M / €5,200€400k / n/a

n/a

Personal creditsto fund creative ideas, individuals, businesses or projects


LendFunctional coverage

• Supporters access a list of projects with funding needs; Interest rates are dependent on credit ratings, defined by MFIs or regular rating companies; Some use hard information while others use soft information for ratings; for most P2P lending in social business, loans are interest-free

• They can select one or several projects, and lend a portion of needed funds • The funds are collected by the platform

• Supporters access a list of projects with funding needs; Interest rates are dependent on credit ratings, defined by MFIs or regular rating companies; Some use hard information while others use soft information for ratings; for most P2P lending in social business, loans are interest-free

• They can select one or several projects, and lend a portion of needed funds • The funds are collected by the platform

1

• In P2P micro-credit to social businesses: When a project is fully funded, the platform transfers the money to a MFI on the ground (usually an interest-free loan), which actually screens borrowers, provides the loan with interests and collect the money backPublished projects are actually already funded by the MFI: the lender backs-up the MFI, who can thus grant a new loan.

• In P2P loans & consumer credit: loans transferred immediately once approved; some platforms guarantee loans

• In P2P micro-credit to social businesses: When a project is fully funded, the platform transfers the money to a MFI on the ground (usually an interest-free loan), which actually screens borrowers, provides the loan with interests and collect the money backPublished projects are actually already funded by the MFI: the lender backs-up the MFI, who can thus grant a new loan.

• In P2P loans & consumer credit: loans transferred immediately once approved; some platforms guarantee loans

3

5

• Information flow through the platform directly from projects to supporters includes project updates and business plans• Information flow through the platform directly from projects to supporters includes project updates and business plans4

• Reimbursement of funds and possibly interests from the specific individuals or projects to platform, platform keeps a portion tofinance the platform

• Reimbursement of funds and possibly interests from the specific individuals or projects to platform, platform keeps a portion tofinance the platform

5

• Reimbursement to lenders, gives project evaluations based on hard or soft facts; Provides an alternative to donations through providing access to money instead of pure giving

• Reimbursement to lenders, gives project evaluations based on hard or soft facts; Provides an alternative to donations through providing access to money instead of pure giving

6

• Platforms funding businesses allow supporters to exchange with borrowers to enable supporters to challenge the business plan, offer advice and assess the risk

• Platforms funding businesses allow supporters to exchange with borrowers to enable supporters to challenge the business plan, offer advice and assess the risk

2

Supporters

Platform

Projects

61

3

2 4

T2T1


LendEvaluation

Fit with Social

Business

Ability to reach

supporters


• Addresses only projects with a return (or at least payback) within 12-36 months• Incentive to build for the future

• Circulation of money – multiplication effect

• Risk on pay back for both the supporter & entrepreneur

• Charge of interests implies short and medium term investments only (risk/ cost too high beyond 3 years)

• Comparable to a reversible donation

• The P2P micro credit model is fully international, on both lender and borrower sides

• On the contrary, the standard P2P loan model, based on a partnership with a bank or on the ownership of a credit license, allows loans only with borrowers and lenders in the same country (in the USA, licenses are even granted by state only)

• Besides payment capabilities (cf donation model), it requires additional capabilities:

• Credit rating: can be conducted by MFI or by lenders themselves (by allowing them to exchange information, ask questions to borrowers before the project is funded); in most cases, the platform performs this activity

• Manage payment schedules and collect reimbursements

• Communication between lenders and borrowers along the project execution

• Reporting on default rates, project successes and impacts...


InvestExisting solutions & trends

• Only a few online platforms allow to invest and become a shareholder of a specific business (e.g. Wiseed), and also trade shares on a private secondary market (Mission markets); despite many projects, no regulated social stock exchange has been launched yet.

• As an alternative, GrowVC is similar to an investment club, allowing to invest in a fund, recommend allocation on startups andreceive a share of return based on recommended startups

• Other models allow to financially support an artist, designer , sport club or a friend and be eligible to a share of net revenues.


Specificities

Charity projects

Private market places 33needs 2011 En n/a Enables to invest, make a social impact, and earn financial rewards

Social Business

Private market places MissionMarkets 2010 En €2M / €2-500M Many missions united in one market, facilitates focused investment

Entrepreneurs


WiseedCrowdCubeMicroVenturesCrowdaboutNow

2009201020092010

FrEnEnDutch

1.0M€/0. 33M€n.a.n.a.n.a.

Allows funders to invest in ventures and get a share of profits

“Investment club” GrowVC 2009 En 9.0M€/0.04M€ Platform for seed funding for startups, community based (socialnetwork) , crowdfunding


Profounder 2010 En 0.2M€/ 0.2M€ Allows funders to invest and get a share of revenues


Music community inv. MyMajorCompanySellaband

20072006

En, FrEn

1.2M€/n.a.0.33M€/0.09M€

Platform for artists to use a limited timeframe to mobilize sponsors, patrons, and supporters

Fashion community inv.

CatWalkGenius 2010 En n.a. Online investment portal allowing interested people to get involved in fashion; concept of crowdfunding to the fashion


Invest Functional coverage

• Supporters access a list of projects with investment opportunities; return is dependent on success• They can select one or several start-up projects, and invest a portion of needed funds, or you can

invest in a specific fund which in turn is allocated once the funding target is achieved• The funds are collected by the platform

• Supporters access a list of projects with investment opportunities; return is dependent on success• They can select one or several start-up projects, and invest a portion of needed funds, or you can

invest in a specific fund which in turn is allocated once the funding target is achieved• The funds are collected by the platform

1

• Most platforms transfer the funds once fully funded and some platforms invest themselves in kind (e.g. MyMajorCompany) • Some offer a support function (e.g. MMC acts as a record label)

• Most platforms transfer the funds once fully funded and some platforms invest themselves in kind (e.g. MyMajorCompany) • Some offer a support function (e.g. MMC acts as a record label)

3

• Information flow through the platform directly from projects to supporters includes project updates, business plans, and marketing materials, in addition to the return on investment

• Information flow through the platform directly from projects to supporters includes project updates, business plans, and marketing materials, in addition to the return on investment

4

• Provide source of projects and income stream for platform based on platform financing criteria; return of investment and possible revenue-sharing from the specific individuals or projects to platform; platform keeps a portion to finance the platform

• Provide source of projects and income stream for platform based on platform financing criteria; return of investment and possible revenue-sharing from the specific individuals or projects to platform; platform keeps a portion to finance the platform

5

• Reimbursement to investors, gives project evaluations based on hard or soft facts; provides access to new type of investments• Expands the venture capital world into a giant social network• Democratizes access to investment

• Reimbursement to investors, gives project evaluations based on hard or soft facts; provides access to new type of investments• Expands the venture capital world into a giant social network• Democratizes access to investment

6

• Via the platforms, supporters exchange with companies to give funds, challenge the business plan, help market the product through social networks, offer advice, assess the risk

• Via the platforms, supporters exchange with companies to give funds, challenge the business plan, help market the product through social networks, offer advice, assess the risk

25

Supporters

Platform

Projects

61

3

2 4

T2T1


Invest Evaluation

Fit with Social

Business

Ability to reach

supporters


• Addresses only projects with a return within 12-36 months and beyond• Amounts raised should be higher to absorb costs of collection and admin/ mgmt costs

• Profits out of the country (less local impact)

• Besides Creativity and Individuals projects, investments are usually reserved to accredited investors; CrowdCube investments are not restricted, but they are open only to UK residents

• This type of model in Social Business is very recent and maturity is low; liquidity seems difficult to ensure

• Capabilities are similar to lending models• In addition, it requires:

• The ability (methodology) to value shares owned to allow investors exit

• The ability to track and report projects financials




Conclusions


Contents


Detailed analysis of websites

Help

Follow

Donate

Lend

Invest

Social entrepreneurs EntrepreneursCharities & charity projects Artistic/ personal projects

Analysed websites in bold


Identity

Activity and Key Figures Comments

Identity


Help – Charity

AXA atout Cœur

Volunteer Match

• Founded in 1991 by the Axa Group, the website was launched in 2009

• Available only in French• Based in France, 55 correspondents

AXA sites in France

• Offers three activities: mobilization of skills, volunteers and skills; 3,500 volunteers with IT, Accounting, etc. skills to support >250 charities (only France)

• Approx. 300 actions supported (e.g. collection of clothes, food..., garage sales, manual/ admin help,...)

• In 2008, 1.5 million euros budget as financial support of field activities by volunteers (as equivalent working hours)

• Using employees volunteering & Corporate Citizenship in order to not only increase the image of the company but the raise the employees‘ motivation and self identification level with the company

• Founded by Four MBA’s Mark Benning, Joanne Ernst, Steve Glikbarg, and Cindy Shove

• Founded in 1998• Available only in English• Based in California, USA

• Platform to connect people who want to volunteer on a local and national level

• Addresses NPOs, Corporations and Volunteers

• Revenues $3m• #1 search result for “volunteer” on Google

and Yahoo! - 850,000 online monthly visitors

• 100,000,000+ pages served in 2008• 73,500+ participating nonprofits & 112

corporate clients• 2.5 million registered members• 4.5 million volunteer referrals since 1998

• Platform received recognition by Obama


Identity


Identity


Help – Charity

Koeo

Idealist

• Founded in 2008 by the Humaneo communication consulting

• Available only in French• Based in France

• Platform for companies to set up their private portal for employees to volunteer to projects for 1 association, associations in a specific field or all associations enrolled with Koeo

• Search function to find specific needs, e.g. accounting, tax advisory,

• n/a

• Founded in 1995 by Ami Dar• Available in English, Spanish,

French • Based in New York, US

• Offers >10K Volonteer and >3k internship opportunities

• 150.000 members, 60.000 organizations, etc.

• Receive money though:- Individual donations, US based firms

pay a fee to become listed - Registration fees for fair exhibition- Foundation support through grants

• Idealist created a wide databasis of NPO, community services, social enterprises, personal data, etc.


Identity


Identity


Help – Charity

J’agis pour la nature

Sparked

• Founded in 2006 by Nicolas Hulot Foundation and Association A pas du loup

• Available only in French• Based in France

• Online Platform for Volunteers and organization to find and offer environmental volunteering possibilities in France (between 1h up to >6 months)

• Currently between 100-150 Projects offered online

• n/a

• Co-Founded in 2008 by CTO Ben Rigby and CEO Jacob Colker

• Available in English• Based in San Francisco, US

• Micro volunteerism marketplace • 5 -15 min time slots• 150,000 people• Platform where nonprofit user’s needs

can be communicated and responded by Volunteers

• Worldwide network for charities/people looking for a volunteer with right skills to answer requests

• E.g. Translations to practice languages, design critiques during lunch break, questions about how to dig a well etc

• Emphasizing on people’s need to contribute without sacrificing too much (only 5-15min)

• Start with gratis inscription to create a critical mass, but will introduce a registration fee for corporations


Identity


Help – Entrepreneurs

StartupSchool

• Founded in 2009 by Bjoern Lasse Herrmann

• English• Based in California, USA

• A marketplace to request and schedule meetings, talks and classes

• A virtual Classroom to meet live and interact via chatting, audio and video conferences in order to share, screens

• > 15,000 hours of startup online education

• To > 2,100 entrepreneurs from > 130 countries

• Cloud computing and Web 3.0 to meet customer’s needs


Identity


Help – Creativity and Individuals

Dreamshake

• Founded in 2008 by Francois-Xavier Tanguy and Arnaud Dubois Dash

• Social network for dreams and projects to form “Dreamteams” and network

• French• Based in France, Belgium and

Switzerland

• 15,000 members • Offline events support the buzz of the platform with monthly meetings and aperos for their members to network their dreams



Help

Follow

Donate

Lend

Invest




Identity

Activity and Key Figures

Comments

Offering

Operating Model and Legal Structure

Follow – Charity

Jumo

• Founded by Facebook co-founder Chris Hughes

• Launched in November 2010• English (only)• Based in New York, USA

• n/a

• Using the Facebook login might become a powerful tool to list charities and social funding projects across different organization

• Online network service “for the social sector”• Similar to Causes on Facebook and Global Giving, not primarily about soliciting

one-time donations but rather to deepen ties between users and their favorite causes

• Tries to build long lasting relationships to causes people care about• Closely linked to Facebook (you post messages on Facebook, use the like

buttons) � can attract people from Facebook who are not yet on Jumo

• Donations are processed by “Network for Good”, a nonprofit, donor advised fund. A 4.75% grant is made with each donation transaction

• Certain uncertainty about business model (still WIP - raised about $3.5 million dollars from a few individual donors for its establishment)

• Jumo plans to cover costs in two ways. They ask for an optional donation when someone does choose to use the platform to give money. but ultimately, the founder hopes to build an outreach and sponsorship platform that sounds like it will function very much like advertising on Facebook


Identity


Comments

Offering


Follow – Charity

Care2

• Founded in 1998 by Randy Paynter & Matthew McGlynn

• Available only in English• HQ in Redwood City, California, US• Managed by the two founders and

Marlin Miller as COO

• Revenue 5.9 mil USD (2006)• Membership of more than15 million• Employees 56 (2008) • 59,712,715 petition signatures by Feb’11

• Covering administrative costs by ads might be welcomed by donators as 100% goes to projects

• Care2 is a social network website offering information about its members' involvement in activism to help connect activists from around the world

• The web portal strives to make it easier for everyone to live a healthy, green lifestyle and impact the causes they care about most.

• It allows for petitions that any citizen can create and distribute through an online identity

• "Click-to-Donate Races" to generate donations to charities (from ad sponsors)• Additional features: job listing (Care2 JobFinder) ; newsletters, blogs, file sharing

• Tries to rely only on “environmentally and socially responsible”advertising to keep the services free


Identity


Identity


Follow – Charity

WiserEarth

Everywun

• Founded in April 2007 by Paul Hawken

• It went "open source" in 2008• Available in English, Spanish,

French and Portuguese

• Tool to track the work of non-profits, businesses, governments, groups and individuals addressing SD issues

• Provides web infrastructure to discover, connect, share, collaborate.

• Community-driven by donations, 501(c)(3) registered nonprofit organization

• NGO directory of more than 112,000 organizations worldwide, over 41,000 registered members

• Maps and connects NGOs, might be used as a tool to contact other NGOs to collaborate

• Both Care2 and Wiser Earth integrated Facebook and Twitter connectivity as the networks rose to prominence

• Founded by Dan Jacobs• Founded in August 2008• HQ in San Francisco, US• 5 employees• Now closed (probably mid 2010)

• Website is down since mid-2010• EveryWun mission is to inspire people,

businesses and cause organizations to think differently about how they can change the world together.

• Allows to embed virtual badges supporting the cause or causes you champion into your blog or social network profile

• You don’t need to have to spend money but can earn and use virtual credits (e.g. you get 100 credits for registering)


Identity


Follow – Creativity and Individuals

MySpace

• Founded in 2003 by Chris DeWolfe• Based in the U.S.• Area served: worldwide, 15

languages

• Users: 66 millions• 42,3 million unique visitors each month

• Recommendation engine, recommending the users other options according to their taste



Help

Follow

Donate

Lend

Invest




Identity


Comments

Offering


Donation – Charity

Causes

• Founded by Sean Parker and Joe Green

• English• Based in the USA, Berkeley and

D.C.

• 500,000 member created causes• 140 million members• $30 million raised for 27 000 non-profits• 200,000 birthday wishes

• Piggybacking facebook (easy to get attention from own facebook network)

• Birthday wishes = good fundraising opportunity

• It is a Facebook application and thus leverages Facebook functionalities• Segmentation: follow and donate• Possibility to give to specific projects (but only 55 projects available)• Focused on aid, not social businesses• Targeted audience: Individual activists, non-profits, foundations, companies

• The members are able to leave a tip for causes and network for good when making a donation

• Donations made through networkforgood.org- Legal responsibility = networkforgood- Meet requirements of IRS

• By clicking the donation button, 4.75% of the sum deducted to cover transaction costs,


Identity



Act of Good

• Founded by Michael Farah and Davud Ruttenberg

• Launched in August 28, 2009• English• Based in the U.S

• n/a • Causes in a smaller scale


Identity


Comments

Offering



betterplace

• Founded in 2006 by Till Behnke• Berlin • Languages: english and german

• Number of projects- 2313 projects open for funding- 3500 projects have been launched on the site

• 40 000 members (donors)• Funds raised: 3 500 000 Euro

• Members of betterplace made responsible for different parts of a project

• The ability to contribute with more than money (i.e. donations in kind)

• Place to let corporations show off their CSR

• Segmentation: Direct, p2p, Worldwide• Scope: individuals and local and international aid organizations in need,

individuals wanting to help• Focus on aid, not social business• Facilitates money donations, volunteering and donations in kind

- Donations in kind/ volunteering: betterplace directs the inquiry to the person responsible for the projects i.e. facilitated through direct contact between the parties, Betterplace not involved

• 100% of the donations forwarded to the projectsBetterplace carries all financial transaction fees

• Costs covered by- Private sponsors- Companies who are offered CSR services through a

subsidiary company; betterplace solutions- Debit and credit cards and PayPal fees


Identity


Identity



BringLight

GlobalGiving

• Launched in May 2007 by Melissa Dyrdahl and Drew McManus

• English• Based in the U.S

• All donations go through American Endowment Foundation, a donor advised fund

• For- profit organization• Charities pay a 7-10% fee based on the

sum raised• provide fundraising and marketing

services to nonprofits and to provide donors with the information they need to make informed donations

• n/a

• Launched in 2009 by Mari Kuraishi and Dennis Whittle

• English • Based in the U.S.

• 141,278 donors• $37,132,068 money raised• 3,704 projects funded

• n/a


Identity


Comments

Offering



Just Giving

• Founded in 2000 by CEO Zarine Kharas

• Available only in English• Based in London, UK• Launched an Iphone app in 2010

• >9,000 UK-registered charities and 1.9 million fundraising pages for users, collecting over £700 million among 12m users

• For instance, JustGiving page of 7-year old Charlie Simpson raised >£143,000 in 48h for the 2010 Haiti earthquake programme (UNICEF)

• Created a donation and fundraising movement using the public sector (gift Scheme)

• Provides online fundraising to enable Charities the electronic collection of donations in the UK

• Donors / Sponsors: Select a charity/person, make the donation and JG adds gift Aid

• Charities: Sign up, communicate to donors, receive donations weekly and Gift Aid within 25 days

• Fundraisers: Build Fund Raising page for free, communicate the web address through Facebook/ Iphone app, receive donations

• £15/ month announcement fee• 5% Commission on donations (using the 25% Gift Aid)• Gift Aid scheme: 25% in tax on every eligible donation by a UK

taxpayer. (06.04.2008 – 05.04.2011 extra 3% for UK charities)


Identity


Comments

Offering



Alvarum

• Founded by Olivier Fleckinger, Guillaume Desnoes

• Founded in 2008• French, English, Dutch• Based in France

• In its first year 800,000 € collected• Used by 80+ organizations

• The alvarum platform can be designed for the specific needs of a project / of an organization

• Provide the tools for NGOs and their key supporters to raise funds with a P2P platform

• Organizes its own events as events are important to decide the size of donations, giving opportunities to the clients to raise funds

• The Alvarum platform allows each user to become an “ambassador and collector” for a foundation, taking advantage of the internets ability to link and network via web

• You can organize events, parties, in memoriams, and challenges to support an event, donate or join an event

• Aggregates relevant charity information.• Makes available a tax receipt• Targeted to donors and supporters

• Leverage ambassadors support through their personal connections

• Associations, corporations or event organizers pay for use of platform: 5% of money raised

(previously Aider Donner)


Identity


Comments

Offering



eBay Giving Works

• Founded in 1999 as partner charity of eBay

• Available only in English• Based in the USA

• In 2008, through eBay Giving Works/eBay for Charity, >$150M for good causes raised

• Partnership with MissionFish provides evay with a Certification system

• Bay allows users donate to nonprofit organizations when they buy and sell through the eBay.com/ eBay.co.uk sites

• Community Selling: donate 10-100% of their sale price• Direct Selling: Nonprofits can sell their own items no selling fees for nonprofits• eBay uses blue and yellow charity ribbon to communicate• At PayPal Checkout: $1 (or more) donation are offered• eBay/PayPal can give $1 right away without buying/selling• MissionFish, as independent NPO screens nonprofits to become members and

certifies them

• n/a


Identity


Comments

Offering



Network for Good

• Founded in 2001 by AOL, Cisco Systems and Yahoo!

• Available only in English• HQ in San Francisco, US• CEO Bill Strathmann; board

members from AOL, Yahoo!, eBay...

• Merged in 2005 with Groundspring.org• Raised over $472 million in online donations to more

than 60,000 different nonprofits • Matched more than 250,000 volunteers with

thousands of nonprofits • Recognized for “revolutionizing philanthropy” (Forbes)

• Good marketing: Network for Good links people with celebrity philanthropists including Kevin Bacon, Ellen DeGeneres, Robert Duvall

• Is a website where users can donate to charities and search for volunteer opportunities

• Leading charitable donation system DonateNow (allows to raise money for a Cause on Facebook)

• Provides branded fundraising widgets• Allowing you to choose from among thousands of volunteer opportunities

powered by “VolunteerMatch”• Non-profits can moreover access tools for fundraising, volunteer recruitment and

donor communication

• Network for Good is funded by its founding partners• As of June 2003, Network for Good began processing donations

with their own transaction processing system , working directly with Bank of America Network for Good accept donations from international donors

• Fees: - Donors: For donations made to Network for Good one-time

donors are asked to make a minimum 5% fee. For recurring donations, a 4.75% grant amount can optionally be added or deducted. Either way, the donation is tax deductible.

- Nonprofits: Supporters who donate via your DonateNow will incur a 3% rate instead of 4.75% for recurring donations or minimum 5% grant for one-time donations


Identity


Comments

Offering



IZI-Collecte

• Founded by Alexander Ayad, Eric de la Ambrose, and Anthony Fifra

• Founded in February 2008• French• Based in France

• Currently used by over 700 associations • Over 100,000 transactions a year

• Opportunity for consolidation of social business fundraising on a unique platform to negotiate rates with banks or payment providers incentivized by developing online payments to reduce quantity of checks managed by banks

• Offers a platform for associations via membership management and fundraising (secure payment solutions), mobilization (emailing tool and database management), and tax receipt management at lower cost (8% v. 2% of costs)

• Saves over 1,400 € on a 589,00 secure transaction by reducing costs of site development (400), transaction (500/mo), printing receipts (281/mo), management of account (79/mo), and newsletter (158/mo)

• Simplifies, saves time, reduces costs, secures donations, and respects environment

• Intermediary for organizations and members

• Control procedures include verifying legal existence of the association by checking the notice published in the Journal Officiel, the faculty of the account holder to act on behalf of the association with the ID of a legal representative, and tax status checking upstream associations that made their tax ruling

• IZI-collecte charges 0.95 €/transaction plus 0.5 € from each withdrawal and “HighPay” charges the same amount for the withdrawal


Identity


Comments

Offering



Endorse for a Cause

• Founded in 2009 by Ed Trimble• Board members from Turner Media,

Hannon Hill and Pardot, Think Interactive, Google, and FortiusOne

• English• Based in California, USA

• Currently 500 retail partners and 10 causes• Causes can be added through member voting

• Social Business as a whole could be a cause to which retailers rebates could be targeted

• A platform for non-profits to expand relationships with socially active supporters and online retailers to benefit from personal endorsements to allow individuals to direct their advertising services to their favorite causes

• After users recommend cool retail brands via facebook and twitter, shop directly via EFAC, or via the retailer using social widgets (plug-ins) on retailer pages, collect money from retailers’ advertising budgets to support causes

• Endorse favorite retailing websites to your facebook and twitterfollowers, endorse from partner retailer sites, or discover new retailers on endorse for a cause

• Based on shopping resulting from endorsements or from the user, the retailer will donate money to causes of your choice

• Secures part of the advertising budget for causes for people who“advertise” their site

• Users earn points, badges, prizes for activity• Retailers give 4-8% of purchase to the cause• EFAC takes 50% of money until costs are covered, then 30%

after that


Identity


Identity



Veo Search

Olozim

• Founded in 2007 by Guillaume Heintz and Arthur Saint-Père (HEC alumni)

• Available in English (for the UK) and French

• HQ in Paris, France

• VeoSearch (a search engine and shopping portal) allows to raise money for charity organizations by giving 50% of ad revenues related to the use of the site to charities selected by the user

• Partnered up with e.g. Yahoo for the search engine and with Kelkoo for the Shopping portal

• In 2008 50 000 Euros were given to charities – 117 261€ until today

• About 220,000 visitors every month

• n/a

• Founded in 2008 by Frank Julien• French• Based in Monaco

• Provide direct marketing services (SMS & Email) to increase customer base: advertisement service for companies, which costs go directly to charity as micro donations

• 70 000 members• 3300 € has been collected• Olozim is free for members who can

choose to receive emails (2/week) in order to receive the kind of advertisement he wants

• Advertiser pays a fee for this communication channel

• n/a


Identity


Identity



SocialVest.us

CauseOn

• Founded in 2009 by Adam Ross• English• Based in the the U.S

• SocialVest allows US-consumers to earn money for non-profit organizations every time they make a purchase online with a partner retail store or with using their registered credit card in a physical store

• Over 600 partner retail stores, over 1.5 million NGOs to donate funds

• Numbers n/a

• Interesting tool to mobilize the corporate world to give charity via consumers

• Allows companies to differentiate and allow to give charity and thereby fund social entrepreneurship more easily.

• Founded in August 2010 by Craig Barnes

• English • Based in the U.S.

• Same as groupon, but the company gives 15-20 percent of the revenue from every deal directly to from them pre-selected cause

• Planning on hiring between 100-130 new employees in 2011 and to expand to over 45 US cities

• Interesting to observe as they took a working business model (groupon) and turned it into a social business


Identity



Mail for Good

• Founded by Bruno Humbert and Ismael Le Mouel in 2009

• Send advertisements in your mail for a DD charity thereby sending donations to that charity

• French, based in France

• 6711.19 € raised• Take 50% of advertising revenues• Advertise • Works with Gmail, Microsoft, Yahoo, Free

and SFR

• n/a


Identity


Comments

Offering



Micro Don

• Founded in 2007 by Pierre-Emmanuel Grange

• French• Based in France

• n/a

• Although micro-don is not an online P2P platform, it allows employees to give up a few cents (or euros) from their salary, and send it to a NPO they may choose (depending on the selected scheme of the employer)

• The social objective of micro DON fundraising by the micro-donation: donate a small amount (pennies to a few euros) mainly through rounding paychecks and invoices to the nearest euro and donating or investing these funds

• It’s only small amounts of a few cents to a euro• Premise of giving a little more often

• Partnered with paycheck managers such as ADP and CEGID to collect micro-donations from the various payrolls they manage

• Needs to go through the paycheck manager• Offers partnerships with companies for payroll• Most donations tax deductible (depending to which NPO the

funds are sent)


Identity


Comments

Offering


Donation – Social Entrepreneurship

SASIX

• Founded in October 2004 by Greater Capital, Managing Director Dean Hand, (Greater Capital Research)

• Available only in English• Based in South Africa

• Currently 100 projects listed on SASIX• 69 projects already funded (1.6million EUR)

• Building on this successful experience, Greater Capital has built the Nexii platform to replicate it to other countries

• Promotes an engaged way of giving charities - “investments” (donations) with pure social return

• SASIX selects and lists social development projects for pure social – return investments (donations with follow up function)

• SASIX provides independent research, evaluation and monitoring to ensure that listed projects meet their set of criteria

• “Shares” on SASIX can be bought for €5 (R50) and be paid with a credit card (or “points”)

• Investors have the option of setting up their own Giving Foundation – a personalized charitable fund which you can set up as a family, an individual or as a business.

• Investors can keep track of how their investments are performing and view the social impact they are having online

• Success maybe partly due to legal requirements in South Africa to give a part of profits to charity


Identity


Comments

Offering


Donation – Creativity and Individuals

KickStarter

• Founded by Perry Chen, Strickler,& Adler

• Launched in 2009,as a private commercial business

• English (only)• Based in New York, USA

• Kickstarter has funded projects ranging from indie film and music to journalism and food-related projects

• If the initiative become popular, a huge leverage is possible via the internet and crowdfunding works best (TikTokLunaTIk example, launched almost 1 million USD within 30 days)

• Marketplace for fund seekers; project-based crowdfunding platform for creative ideas

• Same business model as RocketHub; the only major difference to RH is a reward requirement

• Projects are required to offer “backer” rewards, which are typically things produced by the project itself (e.g. a copy of the CD, a print from the show, a limited edition of the comic)

• It's up to the project creator to create, price, and fulfill their rewards. Most projects also offer creative experiences: a visit to the set, naming a character after a backer, a personal phone call.

• Funding is tax deductible if the creator of the project has a 501c3 statu

• 5 percent fee to the funds raised (all or nothing)• Kickstarter uses Amazon's Flexible Payments Service• Amazon will apply credit card processing fees, which also work

out to roughly 3-5 percent• Currently, US-based user can only start projects (Amazon

payments requirements), but there are plans to expand Kickstarter internationally; funding is however of global reach


Identity


Comments

Offering



Rocket Hub

• Founded by the artists Brian Meece, Jed Cohen, and Vladimir Vukicevic, privately owned (self-funded)

• Launched in Jan 2010• English (only)• Based in the USA

• 76 Successful projects (most projects within 1000-5000 USD range)

• 132 launched but not successful projects listed (some of them are still active; numbers as according to webpage)

• n/a

• Online project-based crowdfunding platform for “creative projects”• Creatives (Musicians, Filmmakers, Authors, Painters, Photographers, Scientists,

Social Experimenters, Actors, Comedians, Chefs, Designers, Developers, Inventors, Programmers, Architects, Journalists, Startup Founders, etc ) are invited to use RocketHub in order to raise funds and awareness for particular projects and endeavors (all-or-nothing funding)

• No screening process before the project goes live• Claims no ownership over the projects • Projects launched on the site are permanently archived and accessible to the

public

• Free for Creatives - to upload a project and begin fueling• If a project is successfully funded, an 8% fee is raised - 4.5% for

RH and 3,5% to payment merchants (all major credit cards accepted)


Identity


Comments

Offering



Babeldoor

• Founded in 2010 by Hortense Garand and a team of artists and professionals in fields of finance, communication, IT, social entrepreneurship, sponsorship, investing

• French, based in France

• Currently 59 projects

• n/a

• A platform for artists, writers, designers, filmmakers, adventurers, entrepreneurs, and humanitarians to use a limited timeframe to mobilize sponsors, patrons, and supporters.

• Subject to rule of all or nothing but can collect unlimited, similar to kickstarter• Intermediary for P2P, a platform• Offers non financial returns on each project• Targeted to French projects

• Utilizes “Paybox” to collect money once the threshhold has been reached before the 100-day period

• Babeldoor charges 5% collection costs


Identity


Identity



Ulule

KissKissBankBank

• Founded by Alexandre Boucherot and Thomas Grange

• “Freemium” crowdfunding site for creative projects, no rewards

• English, French• Based in France

• Currently operating under a “freemium”model where Ulule does not take any commission but will offer premium services later on

• Receives money through ads and sponsorships

• 75 projects funded• 67 current projects• Most donations 500-2000 €

• One can join the Ulule network via Facebook Connect

• Ulule Vox is a social network for exchange on their website

• Aggressive individual marketing through blogs, social networks, blog, and content and information sharing sites

• Founded in 2009 by Vincent Ricordeau, Ombline le Lasseur, and Adrien Aumont modeled

• Crowdfunding creativity for rewards. • French, based in France

• Currently 34 active projects• Many projects are films and trips• 20 successful projects• Avg. successful project: 6,381.5 €• 10% commission for KKBB

• Visually attractive and functional website

• Good marketing and communication, appearing in top magazines and new program


Identity


Identity



Pozible

IndieGogo

• Founded in 2010• English• Based in Australia

• Australia’s first crowdfunding platform for individuals, groups and organizations

• Recently changed their name from FundBreak

• 7.5% fee and credit card fee

• Offers non financial rewards instead of investment or repayment

• Similar to other crowdfunding P2P platforms

• Founded in 2008 by Danae Ringelmann, COO; Slava Rubin, CEO and Eric Schell, CTO

• English (only)• Based in San Francisco, USA;

• World's “largest” crowdfunding platform• Main difference to other fan-funding sites:

not all or nothing funding approach• In July of 2010 partnered with MTV New

Media. • 4% fee on the money raised when

funding goal is reached• + 3% payment fee (in case of successful

funding, 9% if not successful - projects are still launched)

• As of 2010, it has hosted almost 16,000 funding campaigns (successful?) in areas such as music, charity, small business and film.


Identity


Identity



PledgeMusic

FansNextDoor

• Launched in August 2009 by CEO Benji Rogers, a London Based musician and a team of some ex-Warner executives

• English (only)• Based in London, UK

• Online crowdfunding platform, only for music

• 77% of projects launched on the site successfully reaching their fundraising target

• Popular with projects starting almost every 2nd hour. and donations every few minutes (exact numbers n/a)

• Charges 15% of funds raised• Commercial partnerships with MySpace,

SonicBids

• Unusual feature/ Interesting option: encourages artists to include contributions to charity of choice if funding goal is exceeded

• Founded by a group of students at the University of Luxembourg (around Benjamin Larralde)

• Launched in April 2010• Available in French and English• Based in Rueil Malmaison, France

• Online crowdfunding platform, still a beta version

• All-or-nothing approach• Login for platform per sign in or “connect

with facebook”• Currently 8 projects running, of which 4

are fully funded (between €1000 and €11000 – tbc)

• Charges no fees, as the homepage is still in beta. However, uses PayPal for payments, which charges fees

• n/a


Identity


Identity



Invested In

MyFootballClub

• Launched spring 2010• Only available in English• Co-founded by Alon Goren

• Online crowdfunding platform, with non financial return to supporters

• 1047 members, all generated through facebook, twitter and myspace

• n/a

• Like the Green Bay Packers NFL football team, Ebbsfleet United are a publicly owned football team, bought by an internet community led by David Dash in 2007

• English, based in the UK

• Single project website• 4,000 active members who each pay £50

per year or £100 a year for a club membership

• 75% owned by community, 25% by investors and former owners

• Interactive leadership provided by an internet community


Identity


Comments

Offering



Flattr

• Founded in 2007 by Peter Sunde Kolmisoppi

• Launched in 2010• English language• Based in Sweden

• 130 070 things to flatter• 395 506 flatters made• 70,000 users

• When registered, you are always logged on the flattr account- easy to make donation

• Flat pricing, makes “the mental transaction costs”smaller, no restrictions on how many items you flattr, yet fixed amount of money distributed

• Social micro-payment platform• Support creators: You pay a monthly fee to flattr, the user may decide the

amount paid• At the end of the month, the fee is distributed between all the things you have

flattered• Get paid for your work: Users add flattr button to their content• Before you can get flattred you need to add some funds and flattr others• Similar to the Facebook "like" button only with real money• May only flattr the same thing once a month

• 10% of incoming revenue is taken by flattr• Member pays transaction fees• Monthly payments €2 and no more than €100



Help

Follow

Donate

Lend

Invest




Identity


Comments

Offering


Lending – Social Entrepreneurship

Kiva

• Founded in 2005 by M.Flannery & J.Jackley

• Available in English (although the website kivaenfrancais.org provides a search tool in French)

• Based in California, USA

• 190 Mio USD of loans• 490.000 entrepreneurs in 58 countries• Kiva community of approx. 550.000 user from 209

countries• On average: lender provides 6.5 loans of $218

• Kiva networks with many corporations, most of them provide donations, technical support, communication & awareness

• Gift Cards can be purchased and the amount of expired ones goes to Kiva as donation

• Kiva's mission: connect people, through lending, to alleviate poverty• Dignity: partnership relationships (peer-to-peer)• Accountability: more accountability than donations where repayment is not

expected• Transparency: open platform• Loan Focus: Both genders, developing countries & USA• Kiva created a rating system to measure institutional risk, i.e. the risk that a Field

Partner may default

• Partners with MFIs locally who disburse loans/upload stories, lenders browse profiles and lend, Kiva disburses lenders' funds to MFIs, Entrepreneurs repay their loans, Kiva provides repayments to lenders

• Funded by donations of Kiva community lenders (7% of all loans are donations to Kiva)

• Partners:- PayPal: access to technology, research, workplace resources

and employee volunteers - Google Grants recipient - free advertising through Adwords,

attracting new lenders- E&Y: Volunteering, Pro-Bono advisory iv) others mainly

donations (like $1Mio in cash or in kind)73finance + social business + web 2.0

Identity


Comments

Offering



Babyloan

• Founded in 2008 by Aurélie Duthoit and Arnaud Poissonier

• Available in French and English• Based in France

• €1.4 Mio of loans (avge loan of 56€)• 4690 entrepreneurs in 128 countries• Babyloan community of approx. 9.000 user from 128

countries

• n/a

• Platform between users and low-income micro-entrepreneurs via the intermediary of microfinance institutions (Peer-to-peer)

• Community of Babyloanians promoting online social lending (snowball effect)• Raise awareness about microfinance and new solidarity (social

entrepreneurship, social web, etc.)• Focus: developing countries & France

• Commission fees of 2% of money lent to cover the costs of secure transactions and a part of BL’s operational costs

• MFI partners’ invoice: BL provides MFIs with free-interest loan raising, which implies to relate MFIs with lenders and carry outrigorous auditing in order to ensure transparency of the procedure and usefulness of the loans.

• Interest-bearing transfer bank account: money collected on the Website passes through a transfer account remunerated at ~ 0,1%


Identity


Identity



Xetic

Woka

• Founded by Jeremy Camus• Founded in Fall 2010• English, French• Based in Africa

• Micro-credit for Africa• Loans funded : 18150 €• 364 lenders participating

• MFIs = local partner• 3 locations in French-speaking

Africa

• Founded in 2007 by Courtney McColgan and Casey Wilson

• English• Based in the U.S.• Lend money to borrowers in China

• Focus on projects in China• Loans funded: $380.000• Number of borrowers: 469• Number of loans provided: 603• Amount raised: $ 310.000• Average loan: $ 500-600• Number of lenders: 2.651

• Based on partnerships with MFIs


Identity


Identity



RangDe

Dhanax

• Founded in Fall 2006 by Ramakrishna NK and Smita Ram

• Launched in 2008• English• Based in India

• The webpage is down at the moment• Rang De is an online microfinance

company that allows Indians to lend money to fellow Indians that require microloans to start or grow a business

• RangDe charges its borrowers a fee on all transactions to cover costs

• Focused on the Indian market. The local factors is an important thing to keep in mind

• Founded by Shiva Cotipalli, Prashant Mishra

• Founded in 2007• English• Based in the Bangalore; India

• dhanaX is an online-offline person-to-person lending platform that allows Indians to lend and borrow money from each other

• Selection of borrowers offline, lending online

• 6.5% commission from the borrower on every funded loan; 1.5% from the lender on every repayment

• Strong focus on local factors


Identity


Identity



MyC4

Energy in Common

• Founded in 2006 by Mads Kjær and Tim Vang

• Danish, English• Based in Denmark with a regional

office in Africa

• Loans funded : 12,589,953 €• 6,346 businesses from 7 African

countries have borrowed • 18,135 investors

• Lending to SMEs, already quality proven

• Auto bid function, lenders make offers based on preferences (interest rate, sum lent, industry, country, provider)

• Launched in 2010 by Hugh Whalan and Scott Tudman

• English• Like Kiva, only greener, supporting

clean energy projects in the developing world

• 6.1 number of people benefiting from each loan

• $5.53 = average daily household income of EIC entrepreneurs

• 0.1 = average metric tonnes of CO2 emission reductions per year per loan

• 25% EIC loans that have been made to women

• Measures the emissions reduction created by the loan

• Able to donate the money to the organization instead of re-lending, works like a carbon offset


Identity


Comments

Offering



MicroPlace

• Founded in 2006 by Tracey Pettengill Turner, acquired by ebay the same year (as PayPal affiliate)

• Available only in English• Based in San Jose, California, USA

• n/a

• n/a

• Platform to peer-to-peer lending with interest • Investor directs loan to a microfinance project - selects projects (places, causes,

ROI)• Facts are described in the issuer prospectus (key terms, risks, facts of a given

investment)• Investor can pay with PayPal or a bank account• Earns a ROI (quarterly interest payments made to the account, quarterly

statements on investor’s portfolio)• Different loan maturities - choose to get money back or roll it over into another

investment• Customer support for MFIs: marketing, processing and administering the

investments

• Inhouse Payment System (PayPal) to lower costs• Rely on MFIs• 1% of the investment dollars raised on microplace.com as a fee

for the MFI


Identity


Comments

Offering


Lending – Entrepreneurship

FriendsClear

• Founded in 2008 by former directors of the consultancy firm Andersen

• Available in French • Based in Paris, France

• Total of 38 projects in France (14 in Ile de FR)• Between €3.000 – 25.000 (avg. of 10.000)• 40% of projects are commercial services; Others:

Agriculture, handcraft, media, etc.

• As a reference/to attract visitors, FC created a Blog Community to provide and update information and get immediate feedback

• Two platforms as funding alternative, conveying link between entrepreneurs and private investors i) FriendsClear Family - a financial exchange among families and friends ii) FriendsClear Pro: funding of projects between entrepreneurs and investors

• Entrepreneur describes the project, profile, Business Plan and justification -(Friendsclear checks his credit rating)

• Investor registers, selects a projects to finance (at least 100€, at least 3 investors by project

• Collective due diligence of projects: investors can ask questions• Max amount demanded is 25,000€ over 3 years and with around 5.5% interest

rate• Investor earns an average interest of 4.5%

• FC covers the costs by commission of 7-9% (5.5% interest rate and 4% administrative fee) to the borrower – part of 4% and 1% interest rate spread goes to the bank

• 15€ announcement fee • Relies on loans (similar to Kiva, Babyloan, etc.)• No credit rating, risk assessment through BM• Partnerships like FriendsClear established with Credit Agricole

(technical partner) and Aide (partner for Microfinance demands)


Identity


Identity



Funding Circle

CoFundIt

• Founded in August 2010 in the UK by James Meekings

• English

• Low cost p2p diversified small business loans where people spread loans to many businesses and businesses accept lowest rate offers avoiding bank overhead

• £1.3 million lent• Currently no fees to lenders, borrowers

pay 2% of loan• Rates usually between 6-9%

• n/a

• Co-Founded by William Blanco-Bose and Hervé Flutto

• Founded in 2010• English• Based in the Lausanne, CH

• Crowd funding website and social network to connect borrowers and entrepreneurs (debt financing)

• 23 listed businesses• 25 investors, 42 members• Total funding amount of 250,000€• Fee of 5% of total funding

• Using crowd innovation and social network to promote ideas and funding


Identity



FairPlace

• Founded in August 2010 by Eldes Matiuzzo

• Portuguese (Brazilian)• Based in Sao Paulo, BR• Similar to Zopa, Prospeer, Samava

and Lending Club

• First p2p lending service in Brazil• 25 new members a day• 5% fee for one year loan and 8% for two

year loans• Lending fee of 2% of each repayment

(repaid principal and interest)• Average interest rate of 3% • Maximum interest rates are 12% for the

lender

• n/a


Identity


Identity


Lending – Creativity and Individuals

Lending Club

Zopa

• Founded in 2007 by Renaud Laplanche

• English• Based in the U.S.

• Loans funded : $210,598,875• Interest paid to investors since inception:

$16,188,484 • 23,000 lenders connected with 18,500

loans• Total balance outstanding: $179 million• Fees; borrowers: 2.25% - 4.5% of sum

borrowed/ lenders: 1% of each payment received from the borrower

• Own credit rating, based on hard information

• Loans through webBank (industrial bank)

• Founded in 2005 in the UK by Giles Andrews

• Planned expansion to US (awaiting license)

• English

• “Everybody wins, except the Fat Cats”, peer-to-peer loans

• Over 4 million pounds available today• 110 million pounds lent so far• 99.3% repaid• Strong risk controls• Fee of 124 pounds per borrower• Fee of 1% of loan to lender

• n/a


Identity


Identity



Rate Setter

Prêt d’Union

• Founded in October 2010 by Rhydian Lewis and Peter Behrens

• English• Based in the UK

• P2P “safe” loans• Different from Funding Circle and Zopa

by offering one month “rolling” loans that allow lenders to opt out of loans and a ‘provision fund’ from borrowers to guarantee defaults Currently low interest rates around 3.8% for lenders on rolling loans Already 8,600 users

• Offering £1.5 million in loans• Fees by borrowers £115, lenders 10%

interest• Money spread between borrowers

• Similar to Zopa and Funding Circle with the addition of a provisional repayment fund financed from borrowers for lenders and rolling loans that allows lenders to get their money out if they need it

• Basically guaranteed loans

• Founded in 2009 in France • Not launched – planned in 2011• French

• 0.5-3% default rate predicted vs. 5-6% in traditional lending practices

• Potential to be a 5 billion € market by 2015

• n/a


Identity


Identity



Prosper

Quakle

• Founded in 2006 by Chris Larsen • English• Based in the U.S.

• Loans funded : $215,000,000• 1,020,000 members• Feasible range for a loan request: $2,000

to $25,000 • Minimun investment per listed loan: $25• Average loan size (independent of credit

rating): $4,402

• Borrowers assessed on the basis of:

- credit scores, ratings, and histories

- borrowers’ personal loan descriptions,

• endorsements from friends, and community affiliations

- No interaction between borrower and lender

• p2p, no banks involved

• Founded in 2008 by Josselin Digny• English• Based in in London, UK

• Borrowing of money between £1,000-£21,000 with 12-36 months repayment scheme

• Interest rates are determined by the borrower between 1-25% (excl. Quakle’s commission fees)

• Commission fees: £100 service fee for the person who wants to borrow money and £20 to cover the costs of the Debt Collection Agency

• Intermediary of legally binding contracts between lender and borrower

• Currently one loan of £3,500

• Using credit rating and (social-based) reputation score in order to evaluate default rates


Identity



• Founded in 2010 by Dr. Chandra Patni

• Based in the Hertfordshire, UK

• Borrowing of money between £1,000-£25,000 with 12-60 months repayment scheme

• Interest rates are determined by the average of lenders‘ bids (on average 15-30%)

• £80 service fee for the borrower• 0.9% lending fee for the lender• £25 fee for every default on monthly

payments• > £220,000 already funded

• Using credit rating based on online based group (incorporation of social networks) creates more than a lender-borrower relationship



Help

Follow

Donate

Lend

Invest




Identity


Investment – Social Entrepreneurship

MissionMarkets

• Founded by Michael J. Van Patten and Steve Rocco

• Founded in July 2010• English

• Market place for private placement, open only to accredited investors and institutions

• Products include private unregistered debt, private equity, co-op shares, profit sharing notes, direct public offerings....

• It is subject to SEC/ FINRA regulation• In Feb 2011, participated in the funding

of Lumni, an international pioneer in what it calls “human capital financing” invests in higher-education for low-income students, and HotFrog, an online media portal that has yet to launch

• n/a


Identity


Comments

Offering


Investment – Entrepreneurship

Wiseed

• Founded in June 2009 by Thierry Merquiol

• French (only)• Based in Toulouse (France), focused

on the French market

• 15 startups fully co-financed • Maximum funding raised by Wiseed €100.000 due to

legal limitation (min. €50.000)• Currently 4 startups online which are seeking

financing (each of which €100.000)

• Focuses mainly on the French market, regional / cultural characteristics to learn from them, as well as legislative issues

• Crowdfunding applied to the financing of startups• Capital investment tool on businesses with “high growth potential”; the targets

are all innovative SMEs, mostly French, responding to Article 885-0 of Va. Tax Code, which have a strong entrepreneurial culture

• True shareholder approach• Creates one dedicated holding for each company which functions as

intermediary between the investor and the startup– investors get a share in the holding

• WiSEED enables investors to invest from €100, payments are possible with credits cards

• “Investment Management-network “to provide advice on their products, services and strategy

• Management fees of 1 % annually over 5 years• Manages paperwork for €7000 fee (min. 7% - depending on

funding volume)• The earning horizon is a minimum of 5 years, in line with the

time needed to qualify for tax exemption (25%) but mostly in line with the economic reality of these companies.

• Aims at profitability of 7-10% p.a. for investors


Identity


Comments

Offering



GrowVC

• Founded by Jouko Ahvenainen and ValtoLoikanen

• Founded in 2008, launched in 2009• Based in Hong Kong, offices in UK

and Finland

• 7,000 registered members• $18M capital raised• 47 funded startups• 1,554 total number of startups

• Interesting Online Investment club approach

• Platform for seed funding for startups, community based (social network) • funding up to 1M USD per firm-small to average funding• Project allocation decided by members• Members ranked on their recommended investments for the fund (based on

successfully closed deals) • Targeted audience: startups, experts, individual and professional investors• Out of social business• Online investing club

• GrowVC takes subscription fees to allow members to access the details of start ups open for funding


Identity


Identity



Profounder

MicroVentures

• Launched in July 2010 by Jessica Jackley (former CMO of Kiva.org), Dana Mauriello, Ryan Garver , Olana Khan

• English (only)• Based in the USA

• Community-based crowdfunding• Tool to support “offline” transaction:

provides the means for crowdfunding from friends and family and provide returns to them

• Return as a % of revenue• Only one success story: Bronson Chang

& Uncle Clay's House of Pure Aloha ($54.000 raised from 19 friends, family, classmates, and loyal customers, who are offered 2% of revenues over 4 years as well as other bonuses like private tastings of new shaved ice flavors)

• Highlights the local / first circle of friends factor when raising funds - people rather give to people they know/feel connected to

• Share of revenue is very intuitive, however uncertainty about how profit is measured and by whom

• Very low activity

• Founded in 2009 by William M. Clark and Scott Rhode

• English

• Community-based crowdfunding• Investors are able to invest from $250 to

$ 5000 (accredited investors)• The companies seek funding between $

50 000 and $ 250 000

• Investment platform aiming to fund bigger funding needs than its competitors

• combines peer-to-peer lending with the venture capital aspect enabling the individual investor early access to private opportunities


Identity


Identity



CrowdAboutNow

CrowdCube

• Co-founded in 2010 by David Gernaat

• Dutch• Based in Utrecht, NL

• Platform to invest in startups (with minimum of 10€)

• Crowed about now charges €0.77 per transaction

• Return and maturity depend on the startup

• n/a

• Founded in 2010 by Darren Westlake and Luke Lang

• English• Based in the UK, only facilitating

investments in UK companies from UK citizens

• Minimum target amount is £ 5000• Minimum investment is £ 10• No maximum investment level• Allows entrepreneurs to offer different

types of return, financial (dividends) or non financial

• Owned shares can be sold as the platform plans to include an “exchange”

• However, there is no voting rights attached to the shares

• Offer a reward (a gift, a good or a service), usually related to the business to the Investor as an incentive to invest in the company

• For instance, an entrepreneur could give away products or a discount on future purchases of products or services.


Identity


Comments

Offering


Investment – Creativity and Individuals

MyMajorCompany

• Founded in 2007 by Michael Goldman, A. Marciano, S. Barsikian

• French, English, Based in France• Expanded to UK in dec 2010, led by

CEO Paul-Rene Albertini• Also Expanding to Germany, Italy,

Spain, Scandinavia

• MMC France has 28 fully funded acts and 98,500 registered users

• MyMajorCompany offers significant support to secure the success of selected artists

• A platform for artists, writers, designers, filmmakers, adventurers, entrepreneurs, and humanitarians to use a limited timeframe to mobilize sponsors, patrons, and supporters.

• Assures users that it offers same benefits of a traditional record label in terms of professionalism, networking, commercial strength, finance, and promotion in addition to 20% of net revenue, complete media site, and the investing community

• To attract investors, they offer in depth explanations of how the investing process works to prove they have the expertise to handle the money of investors

• Intermediary for P2P, a platform with support• Offers a return on investment (40% net revenue)• Targeted initially in France but spreading throughout Europe• Targeted to investors and supporters

• Raise funds from investors with donations from 10-1,000 to reach 100,000 threshold

• Once they start making money, the net revenues are split 20% for the artists, 40% for the investors, and 40% for the labels

• Investment returns decreases to 10% once revenue has exceeded £750,000

• The net revenues consist of sales of digital and physical album and sales from 360°rights minus the costs of manufa cturing, mechanical rights, selling and distribution, and unsold goods.

• MyMajorCompany is a different kind of crowd sourcing because they give much more support than other platforms once funded as it operates as a record label under the main goal of being fairer to artists and music creators


Identity


Comments

Offering



SellABand

• Launched in August 2006, went bankrupt in Feb 2010 (Johan Vosmeijer, ex Sony/BMG)

• HQ in Germany and the Netherlands • Available only in English• Relaunched in 2010 (HQ in

Germany)

• When going bankrupt, it had raised $3M for 23 artists.• On April 8, 2008, SellaBand raised EU€3.5 million[

US$5 million)

• “Failure” factors: Insufficient selection of projects and lack of promotion

• The site has seen much less activity since the relaunch and many artists and believers have left or become inactive.

• SellaBand takes 15% of the funding budget• Not successful business model: The Initial business model was

‘investing’ (such as my major company): Fans could contribute a minimum of 10 Euros to the help their favorites launch an album.The money they would be returned to them if the band turned a profit. Effectively, the website allowed fans to become stockholders in their favorite groups.


Identity


Comments

Offering



Catwalk Genius

• Co-founders are Helen Brown (also CEO), Lynsey Goldring and Mal Hill

• Launched in Jan 2010• English (only)• Based in Ireland (also UK company

reg.)

• Payments methods are PayPal, Visa, MasterCard or Visa Debit

• Currently 45 project listed with an average of 35.000 GBP (however, most projects have a funding process of 0-2%)

• Too many projects with too low funding progress might reduce the credibility of the portal and thereby the popularity. Prescreening is very important

• Online investment portal allowing interested people to get involved in fashion; concept of crowdfunding to the fashion industry � aims to solve the funding problem of by emerging labels

• Privately owned, commercial business• It is both an shopping/retail and an investing portal (buy a share in collections) • With the “back a Designer” feature, a label can put itself up for backing. It can

showcase its designs and begin looking for supporters. • Supporters can also earn perks (exclusive fashion treats in return for support)

• Supporters pay £11/share in the collection being backed. Once 5,000 shares have been sold, Catwalk Genius pays out £50,000 to the designer.. (fee is hence 9.1%)

• The funding collected: create a clothing range and the revenues from its sales are shared equally between designer, supporters and Catwalk Genius.

• Labels commit to splitting any profits (40% to Catwalk Genius, 30% to supporters and 30% for designers/labels); Uncertainty about how profit is defined/ calculated


Identity


Comments

Offering


Other models to collect small amounts from the crowdDonate – Credit cards and point-based loyalty programs

• Credit cards couple with reward programs to attract new customers

• There is over $800 billion in outstanding credit card debt in the U.S. illustrating the potential of funding/donations as one dollar spent usually equals one reward point

• Opportunity for a Social Business rewards card for either donating or investing via credit card rewards to fund their social businesses

• Social Business can also enter in an existing credit card rewards program

• Most banks currently offer credit cards with rewards of frequent flyer miles, consumer goods, or cash back

• These points are redeemed for rewards• These rewards can be Example: If you have a Bronx Zoo Credit Card, all of your

accrued credit card points based on your purchases would help fund the Bronx Zoo

• A reward system for social businesses would offer an incentive for a cardholder to use their card for the good of these businesses so an agreement would be reached with issuer

• Depending on the type of card, rewards will generally cost the issuer between 0.25% and 2.0% of the spread


Identity


Comments

Offering


Other models to collect small amounts from the crowdDonate – MicroDon

96

• Founded in 2007 by Pierre-Emmanuel Grange

• French• Based in France

• n/a

• Premise of giving a little more often/ regularly• Low cost of collection, but challenge to approach and

convince both paycheck managers and corporations

• Objective to develop micro-donations, by piggybacking existing payments and collecting “change” (from an electronic payment)

• There are 2 models:- microDon offer associations to distribute cards in local grocery stores,

allowing to give (card value of 1, 2 or 3 euros)- microdon partners with paycheck managers and companies to allow

employees to give up cents (or more) on their salary; consolidated funds can be directed to 1 or more associations

• Donations are tax deductible (depending on what association donations are transferred to)

• Small donations are processed in the same time as an existing transaction (store check out or payroll), thus reducing the cost of collection

finance + social business + web 2.0



Conclusions


Contents


Data collected (1/3)Help & Follow websites

Model Domaine Nom sub cat Creation

Funders

(or

members)

Total raised

since creation

# of projects

funded since

creation

Estimated

per year

Average

funding per

project

Average

funding per

supporter

Help Charity Idealist Volunteer rec. 1995 1,000,000

Charity Volunteermatch Volunteer rec. 1998 2,500,000

Charity Sparked Volunteer rec. 2008 150,000

Charity Axa Atout cœur Volunteer rec. 2009 15,000 300 actions

Charity Koeo Volunteer rec. 2009

Charity jagispourlanature.org Volunteer rec. 2010

Fun Dreamshake Volunteer rec. 2008 1,440

Entrepreneurs startupschool X 2009

Follow Charity Care2 Social network 1998 15,000,000

Charity WiserEarth Social network 2007 45,000

Charity Everywun Social network 2008

Charity Jumo Social network 2010

Fun MySpace Social network 2003 100,000,000

Sources: websites, news, estimates98finance + social business + web 2.0

Data collected (2/3)Donate websites


Funders

(or

members)

Total raised

since creation

# of projects

funded since

creation

Estimated

per year

Average

funding per

project

Average

funding per

supporter

DonateCharity Veosearch Browse 2007 €0.12M €0.06M €600-4000

DonateCharity mailforgood Browse 2009 €0.01M 12 €0.01M €558

DonateCharity Justgiving Event page 2000 12,000,000 €840M €105M

DonateCharity Aiderdonner Event page 2008 20-50,000 €1-2M 80 €1-2M €10-20,000 €30-100

DonateCharity Global Giving Portal 2002 100,000 €23M 2,700 €2.9M €8,547

DonateCharity betterplace Portal 2007 €3.5M 950 €2.5M €3,684

DonateCharity bringlight Portal 2007

DonateCharity Act of Good Portal 2008

DonateCharity Ebay GivingWorks Shop 2003 €154M 18,544 €38M €8,296

DonateCharity Olozim Shop 2009 80,000 €0.04M 10 €0.02M €4,062 €0.5

DonateCharity Endorse for a cause Shop 2010

DonateCharity Socialvest.us Shop 2010

DonateCharity CauseOn Shop 2010

DonateCharity Causes Social network 2007 140,000,000 €23M €8M €285

DonateCharity Network for Good Tool 2001 €372M 60,000 €100M €6,205 €77

DonateCharity izi-collecte Tool 2008 €1.2M

DonateCharity Avon walk 2003 500,000 €380.0M €50M €100

DonateCharity Microdon 2007

DonateSocial business SASIX 2004 €1.6M 70 €0.3M €22,857

DonateFun MyFootbalClub Crowdfunding 2007 4,000 €1.4M 1 €0.5M €120

DonateFun Invested.in Crowdfunding 2010

DonateFun IndieGoGo Crowdfunding 2008 €0.9M 336 €0.4M €2,538

DonateFun Kickstarter Crowdfunding 2009 470,000 €29M 6,500 €19M €4,462 €62

DonateFun RocketHub Crowdfunding 2010 €0.21M 89 €0.2M €2,385

DonateFun Kisskissbankbank Crowdfunding 2010 €0.13M 20 €0.19M €6,250

DonateFun Ulule Crowdfunding 2010 3,000 €0.12M 60 €0.18M €2,000 €40

DonateFun Pozible Crowdfunding 2010 €0.11M 43 €0.11M €2,625

DonateFun Babeldoor Crowdfunding 2010 €0.07M 35 €0.11M €2,000

DonateFun PledgeMusic Art crowdfunding 2009 €0.2M 40 €0.2M €5,385

DonateFun FansNextDoor Art crowdfunding 2010 €0.02M 4 €0.03M €4,351

DonateFun Flattr Micro funding 2010 €1-10Sources: websites, news, estimates


Data collected (3/3)Lend & Invest websites


Funders

(or

members)

Total raised

since creation

# of projects

funded since

creation

Estimated

per year

Average

funding per

project

Average

funding per

supporter

Lend Entrepreneurs Friendsclear P2P loan 2010 44 €0.150M 15 €0.300M €10,000 €3,409

Lend Entrepreneurs Fairplace P2P loan 2010

Lend Entrepreneurs Cofundit P2P loan 2011 €200,000

Lend Fun Zopa P2P consumer credit 2005 €120M 20,000 €70M €6,000

Lend Fun Prosper P2P consumer credit 2006 1,000,000 €168M 33,800 €100M €4,961 €168

Lend Fun LendingClub P2P consumer credit 2007 €169M 22,000 €100M €7,692

Lend Fun Rate Setter P2P consumer credit 2010 10,858 €2.3M 440 €7M €5,188 €210

Lend Fun Yes-Secure P2P consumer credit 2010 €0.3M €0.4M

Lend Fun Quakle P2P consumer credit 2010

Lend Fun Prêt d'Union P2P consumer credit 2011 n.a.

Lend Fun FundingCircle P2P loan 2010 €11M €35,385

Lend Social business Kiva P2P microcredit 2005 550,000 €146M 260,000 €29M €292 €168

Lend Social business MyC4 P2P microcredit 2006 18,000 €13M 6,366 €3M €2,042

Lend Social business Microplace P2P microcredit 2006

Lend Social business Wokai P2P microcredit 2007 €0.29M 639 €0.10M €455

Lend Social business Babyloan P2P microcredit 2008 9,000 €1.4M 4,700 €0.7M €298 €69

Lend Social business energyincommon P2P microcredit 2010 €0.02M 268 €0.02M €71

Lend Social business Xetic P2P microcredit 2010 400 €0.020M 60 €0.04M €333 €50

Invest Social business MissionMarkets Private market place 2010 €2.0M 1 €2-500M min €50,000

Invest Entrepreneurs GrowVC Inv Club 2009 7,000 €14M 47 €7M €294,599 €1,978

Invest Entrepreneurs Wiseed Private market place 2009 €1.5M 15 €1.0M €100,000 €400

Invest Entrepreneurs MicroVentures Private market place 2009

Invest Entrepreneurs CrowdaboutNow Private market place 2010

Invest Entrepreneurs Crowdcube Private market place 2011

Invest Entrepreneurs Profounder Community inv 2010 €0.1M 4 €0.2M €26,154 €722

Invest Fun SellaBand Community inv 2006 €1.66M 59 €0.33M €28,136

Invest Fun MyMajorCompany Community inv 2007 100,000 €4M 35 €1.2M €100,000 €35

Invest Fun CatWalkGenius Community inv 2010 €0M 0 €0M

Sources: websites, news, estimates100finance + social business + web 2.0

Extract of sources

Directories, reviews and reports

• Wiseclerk blogwww.p2p-banking.com

• Wiseclerk forumswww.wiseclerk.com/

• AppAppeal – Charitywww.appappeal.com/apps/charity/

• 9 crowdfunding websites to help you change the worldblog.webdistortion.com/2010/07/18/9-crowdfunding-websites-to-help-you-change-the-world/

• Impact Investments: An emerging asset classwww.jpmorgan.com/pages/jpmorgan/investbk/research/impactinvestments

Articles

• What Is Private Placement vs. Public Offering?www.ehow.com/about_6390604_private-placement-vs_-public-offering_.html

• Retenir les grands principes de « l’offre au public » de titres financierslarevue.ssd.com/Retenir-les-grands-principes-de-l-offre-au-public-de-titres-financiers_a916.html

• Equity investment and social enterprisewww.businesslink.gov.uk/bdotg/action/detail?site=210&r.s=sc&r.l1=1073858805&r.lc=en&r.l3=5000808603&r.l2=5000783439&type=RESOURCES&itemId=5000808613

• The Social Stock Exchange May Come to Fruitionwww.clearlyso.com/sbblog/?p=1203

• Move to change securities regulations could mean big changes in the micro-funding modelwww.boiseweekly.com/boise/alms-for-the-creative-crowdfunding-means-passing-on-traditional-funding-to-pass-the-collection-plate/Content?oid=1903663

• SEC Regulations Barricade The Crowdfunding Floodgateswww.huffingtonpost.com/kevin-lawton/crowdfunding_b_789088.html

• MyMajorCompany et les limites de la production communautairefr.techcrunch.com/2010/11/22/mymajorcompany-limites/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+francaistechcrunch+%28TechCrunch+en+Francais%29&utm_content=Google+International
