On October 23rd, 2014, we updated our
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Change the World by Transforming Traditional Donors into Social Investors
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 .
Liquidnet For Good includes robust employee engagement efforts, sustainability programs, and a signature project: a holistic living, learning and healing community for orphaned and vulnerable youth in Rwanda. Now, we’re also leveraging our core competency.
Through our Markets for Good initiative, Liquidnet is applying what we do best in our business to the social sector.
LEVERAGING LIQUIDNET’S CORE COMPETENCY
Liquidnet’s core competency is to use technology and the power of collaboration to remove inefficiencies in a fragmented marketplace.
MARKET DEFINITION Market: n. 1. a place where buyers and sellers convene for trade.
THE PROMISE OF MARKETS In a more perfect world, markets would efficiently distribute money – in the form of debt, equity and philanthropic grants – to organizations that are sustainably achieving the greatest social impact .
THE SPECTRUM OF MARKETS
THE SPECTRUM OF MARKETS RETURN MEASUREMENT PLATFORMS INVESTMENT TYPE AVERAGE TRANSACTION COST MARKET SIZE “ MARKETS FOR GOOD” FINANCIAL CAPITAL MARKETS Financial Return Financial Performance Measurement
Retail (mutual funds, online brokers)
Institutional (Exchanges, Alternative Trading Systems)
About 5% FINANCIAL CAPITAL MARKETS $50 Trillion SOCIALLY RESPONSIBLE INVESTING Social Screening and Shareholder Advocacy $7 Trillion
Markets for Good aims to address the CHALLENGES IN THE PHILANTHROPIC ECOSYSTEM:
How might we make it easier and cheaper for nonprofits to raise money?
How might we make it easier for donors to find effective nonprofits to donate to?
How might we ensure that higher-performing nonprofits are receiving enough donations so that they can effectively meet their mission?
GIVING MARKETS TODAY
BILLIONS OF DROPS IN MILLIONS OF BUCKETS 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
THE LONG TAIL OF GIVING 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
LITTLE GIVING BASED ON PERFORMANCE Source: Hope Consulting, Money for Good: The US Market for Impact Investments and Charitable Gifts from Individual Donors and Investors, May 2010
UNDERSTANDING DONORS If we understand the various motivations driving donors, we can more fully engage them in social investing. Source: Hope Consulting, Money for Good: The US Market for Impact Investments and Charitable Gifts from Individual Donors and Investors, May 2010
TOMORROW: GIVING MARKETS With enough demand from donors and sufficient supply of information about nonprofits , we might transform the philanthropic ecosystem into giving markets . TRANSACTION PLATFORM FOR INFORMATION & INVESTING 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 .”
LIQUIDNET IMPACT CHALLENGE TO NET IMPACT MEMBERS: How can we turn traditional donors into social investors who demand a high social return on their investment?