Social enterprises may have their heart in the right place, but generating a healthy revenue can often prove challenging. Striking a balance between serving the greater good and making money is a trying mission.
So, when we learned that betterplace.org recently began paying salaries from a growing operational income, we spoke to CEO and founder Till Behnke to find out more about the Berlin-born business that’s making headway around the world.
Why there’s a betterplace.org
Fundraising projects clamor nearly every city to far-flung region of the world. The heavy profusion of citizen organisations (COs) can be overwhelming. So, when the philanthropic urge kicks in to either start a project or support one, it’s hard to know where start.
That’s why betterplace.org makes sense. It’s an easy-to-navigate, peer-to-peer and crowdfunding platform that works like a marketplace of projects – giving grassroots setups a real go. Betterplace.org doesn’t take a cut from donations – 100% of the money goes straight to the chosen project.
“The variety is that there’s a soup kitchen in Berlin for homeless people to three students in Kenya drilling a well. And we have 1000s of environmental and social causes that look for money and donations,” says Behnke.
There are now up to 3,500 projects on the database from across 132 countries world-wide. The size of these projects range from large-scale disaster-relief ventures, such as the Redcross and Unicef, to small-time endevours which benefit from using betterplace.org’s tools to make their project visible and accessible.
Not your everyday crowdfunder
The platform gives anyone the chance to start a fundraising-volunteering project. It’s as easy as posting up a description of project needs, for example: “We need €300 to build a well and four volunteers to do it”. Each project is made as transparent as possible. Organisers are encouraged to provide pictures and stories of their project progress so donors can follow what’s happening with their contribution.
It all comes down to trust
But how does the donor know if their money’s being wisely spent? The easy answer is “they don’t.“ Betterplace is peer-to-peer: “We’re not a rating agency and we don’t talk to micro-finance institutions or to large organisations, you simply decide to support a person or a group,” says Behnke.
The betterplace.org team, work from the resounding principle of creating a “web of trust.” Essentially, it’s up to users to judge the credibility of COs, and it’s the responsibility of COs to rally up support, confidence and trust in its projects.
“Grassroots projects are directly there, so you’d have a reason to trust or know them or someone that knows them. That’s why we work in a community environment with pictures and people who leave references,” he adds. The rest of it is transparency, with the papers to show that €3 million came in last year, and €3 million left betterplace.org’s bank account last year.
Projects receive 100% of donations + betterplace makes money = everyone’s happy
After three years of building up the organisation, betterplace.org began seeing its business model work – six months ago. With a workforce of around 20 people, Behnke was able to pay salaries from the company’s operational income without monetary return to investors.“Our investors have given the money as a donation to us… It’s a very good feeling that we can now say okay we’ve done something good with it,” he says.
So how does it make money?
Two ways: Through an optional tipping system by donors, and by licensing out the company’s technology and database to big companies and media partners. “We white label betterplace to third parties,“ says Behnke. Large corporatons which have employee volunteering schemes, can use the company’s API to build it into their own front-end so people can surf their intranet in search of specific types of projects. “For every euro that someone donates to betterplace as an organisation, we generate – through the platform – €6-10 for the social project in the database,” explains Behnke.
How it began..
“I used to live and play Rugby after school in South Africa. But I got in touch with social projects andwhen you see how much you can change little contributions, a little money, and a few people, you can change a lot of things,” muses the 32 year-old German founder.
Behnke’s encounter with day-to-day struggles led him to volunteer at a number of local development projects. Upon returning to Germany, he began working for major car manufacturer DaimlerChrysler in 2004 – specializing in corporate fleet management. After experiencing a cushy corporate life with all the plushy perks, he decided to carve out a more ‘meaningful’ career path by venturing into his brainchild –betterplace.org, in 2007.
Betterplace, bigger plans for 2012
Betterplace.org is also looking at going mobile by teaming up with a phone company that is both an enabler and partner. “We’re going to be on mobile platforms, mobile websites, apps and really have location based services where you can sit and see what local projects are happening around you if you want to volunteer,” says Behnke.
Currently, the platform is in German and English with plans well underway to begin internationalising betterplace on a bigger scale. A pilot project is in the works for Norway, where the Norweigen Cronna will be the first mulit-currency impemantion and Norwegian – the third language on site. Behnke’s banking on Norway’s oil-driven wealth to help feed COs and drive in that recently-realised revenue stream.
Read more about Berlin’s social businesses:
Getting to know Knowable.org
Doing good deeds at Doonited