markets for good presented by liquidnet

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Visual SenseMaking by Humantific© 2010 Liquidnet Holdings, Inc.

October 2010

© 2010 Liquidnet Holdings, Inc.

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Liquidnet is the premier global marketplace for institutional investors.

Since 2007, the company has devoted a percentage of revenues to social causes through an award-winning corporate social engagement program called Liquidnet For Good.

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Beyond its employee engagement efforts, sustainability programs, and signature project (a comprehensive residential community and high school for orphans in Rwanda), Liquidnet is leveraging its core competency—using technology and the power of collaboration to remove inefficiencies in a fragmented marketplace—to maximize social impact.

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Markets for Good is Liquidnet’s effort focused on creating greater social impact throughout the social capital markets.

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CHALLENGESIN THE PHILANTHROPIC ECOSYSTEM

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How might we make it easier and cheaper for nonprofits

to raise money?

CHALLENGE:

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How might we make it easier for donors to find effective

nonprofits to donate to?

CHALLENGE:

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How might we ensure thathigher-performing nonprofits are receiving enough donations

so that they can effectively meet their mission?

CHALLENGE:

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THE SPECTRUM OF MARKETS

FINANCIAL CAPITALMARKETS

Financial Return

Financial Performance Measurement

• Debt• Equity

• Retail (mutual funds, online brokers)• Institutional (Exchanges, Alternative

Trading Systems)

About 5%

FINANCIALCAPITALMARKETS

$50 Trillion

SOCIALLY RESPONSIBLE

INVESTINGSocial Screening and Shareholder Advocacy

$7 Trillion

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RETURN

MEASUREMENT

PLATFORMS

INVESTMENTTYPE

AVERAGETRANSACTION

COST

MARKET SIZE

SOCIAL CAPITAL MARKETS / MARKETS FOR GOOD

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THE SPECTRUM OF MARKETS

FINANCIAL CAPITALMARKETS

Financial Return

Financial Performance Measurement

• Debt• Equity

• Retail (mutual funds, online brokers)• Institutional (Exchanges, Alternative

Trading Systems)

About 5%

FINANCIALCAPITALMARKETS

$50 Trillion

SOCIALLY RESPONSIBLE

INVESTINGSocial Screening and Shareholder Advocacy

$7 Trillion

10

RETURN

MEASUREMENT

PLATFORMS

INVESTMENTTYPE

AVERAGETRANSACTION

COST

MARKET SIZE

How might we apply best practices, technologies, and metrics across all markets?

How might we reduce the transaction costs in

the giving markets?

How might we make better use of the dollars in the

giving markets?

SOCIAL CAPITAL MARKETS / MARKETS FOR GOOD

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TODAY: PHILANTHROPY

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How might we make it easier for donors to find effective

nonprofits to donate to?

How might we make it easier and cheaper for nonprofits to

raise money and demonstrate performance?

How might we enable beneficiaries to provide feedback

and have their voice heard?

Today, we do not have enough readily available, reliable, and universal information to support the philanthropic ecosystem—the giving markets.

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Source: 1. Figures come from the Foundation Center, the Urban Institute, the IRS, and other sources, via Disrupting Philanthropy: Technology and the Future of the Social Sector, by Lucy Bernholz with Edward Skloot and Barry Varela

FACTS ABOUT PHILANTHROPY

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In general, most giving comes from many donors, but goes to relatively few nonprofits.

How might we provide tools for individuals to give more effectively?

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Source: Giving USA Foundation (2007) Sources: Foundation Center, Slate, via Disrupting Philanthropy: Technology and the Future of the Social Sector, by Lucy Bernholz with Edward Skloot and Barry Varela

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How might we provide sufficient information about all nonprofits?

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Source: Giving USA Foundation (2007) Sources: Foundation Center, Slate, via Disrupting Philanthropy: Technology and the Future of the Social Sector, by Lucy Bernholz with Edward Skloot and Barry Varela

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UNDERSTANDING DONORS

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If we understand the various motivations driving donors, we can more fully engage them in social investing.

Source: Hope Consulting, Money for Good: The US Market for Impact Investments and Charitable Gifts from Individual Donors and Investors, May 2010

How might we reach all donors, regardless of the reasons why they give?

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UNDERSTANDING DONORS

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While donors say they care about nonprofit performance,very few actively donate to the highest-performing nonprofits.

How might we get people to act on their interest in

nonprofit performance by doing some research?

How might we get people to care about social

impact and other measures of performance?

How might we get people to give to the top nonprofits,

not just those that are ‘good enough’?

Source: Hope Consulting, Money for Good: The US Market for Impact Investments and Charitable Gifts from Individual Donors and Investors, May 2010

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TOMORROW: GIVING MARKETS

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To ensure that funding goes to the highest-performing nonprofits, traditional donors will need to become social investors.

How might traditional donors become social investors who demand a high social return

on their investment?

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With enough demand from donors and sufficient supply of information about nonprofits, we might transform the philanthropic ecosystem into giving markets.

TRANSACTION PLATFORM FOR INFORMATION & INVESTING

RETURN:“I demand a high social return on my investment and I know that I am making an impact.”

RETURN:“We can demonstrate that we are making a difference and

are able to attract more funding to continue to do so.”

RETURN:“My needs are being met and I

have a voice.”

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With enough demand from donors and sufficient supply of information about nonprofits, we might transform the philanthropic ecosystem into giving markets.

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A vision of how some components of a giving markets platform might correspond to the best practices of a successful retail market, providing a range of information to connect buyers and sellers.

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EXISTING EXAMPLES:

EXISTING EXAMPLES:


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Easy-to-use financial transaction functionality provides a safe, reliable and efficient way to take action and donate.

Seamless integration with social media, which builds on existing relationships and networks

Ability to search, browse, or select organizations in a variety of ways, to make it easier for donors to find effective nonprofits to donate to.

Objective information about the nonprofit, their theory of change, and why they need funding.

Additional multimedia helps tell the nonprofit’s story and connect with their donors.

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Information about how others behaved, based on powerful sales analytics, offers insight into important market dynamics.

Standardized data about the nonprofit allows comparison across organizations.

EXISTING EXAMPLES:

Expert reviews, “seals of approval,” and deep analysis of performance inform donation decisions.

EXISTING EXAMPLES:

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Clear and simple visual rating system to quickly indicate nonprofit performance.

EXISTING EXAMPLES:

EXISTING EXAMPLES:

Reviews from beneficiaries, volunteers, and other donors allow for transparent feedback.

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Organizations are intuitively categorized, making them easier to search.

EXISTING EXAMPLES:

markets for good presented by liquidnet

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