Dozens of people gathered last week at Geneva’s Impact Hub to celebrate the launch of one of Switzerland’s newest non-profit organizations: Cause Direct, an online platform that serves to connect certified NGOs worldwide with interested funders and investors.
The concept behind the site isn’t a novelty. Thousands of people around the globe use websites such as Razoo.com or GoFundMe.com as vehicles to raise funds for social events, personal causes, charities and even expensive medical bills.
Cause Direct, however, is moving in a different direction. While online fundraising is their framework, Patrick Vieljeux, the non-profit’s CEO and founder, insists Cause Direct is “not a crowd-funding platform like you might find in the United States.”
“What differentiates us from those platforms is that we are a non-profit ourselves,” said Vieljeux in an interview with Le News. “We redistribute all our profits to the charities registered to our platform, which mechanically lowers their cost of fundraising. Our objective is to become the web’s cheapest platform; we anticipate by 2016 to charge something below three percent, which is much lower than the cheapest platform today.”
As a Swiss “Société à Responsabilité Limitée”, or limited liability company, Cause Direct does not charge the donor for their gift, but instead charges each charity a 5% success fee every quarter on the amount raised. Then, after covering its costs, Cause Direct redistributes its revenue surplus back to the charities.
One of the benefits of this system for the charities, Vieljeux explains, is that the transaction takes place without an intermediary, and the charity directly receives the funds gifted. Charities only pay based on the funds raised, minimizing their financial risks.
“Knocking on the doors of big and small companies for funding is an extremely tiring and time-consuming activity,” said Jan Hellman, founder of the Non-Violence Project Foundation, during his presentation at Cause Direct’s launch party. “Cause Direct allows us to raise funds in a different and exciting way.”
Additionally, thanks to Cause Direct’s business-to-business model, charities also benefit from the platform’s several corporate partners, who can participate in employee grant-matching programs and create profiles on the platform to easily manage their corporate-giving goals.
“Traditional companies right now want to include social dimensions in their business,” Vieljeux said. “We get most of our audience from company employees. We expect to have 2.7 million users by the end of the first quarter next year, with eight companies already on board.”
On the donor side, Cause Direct allows donors to give funds to a targeted project, such as a school-building project in Cambodia, as long as it is managed by a certified NGO. As a result, the donor is able to direct their funds to a cause more aligned with their interests instead of a general NGO.
Risks for the donor are also minimized and the process is kept transparent due to a selective screening process that all charities and projects are submitted to before being admitted to the platform. Société Générale de Surveillance, a world-leading certification company, has partnered with Cause Direct to define a rigorous selection protocol that verifies a charity’s accountability, sustainability, performance and stakeholders, among others.
“To be able to register a project, you must be either (1) a certified NGO, (2) managed by a certified NGO, or (3) a company. If you have a project where you want to raise money for a friend who needs surgery, you unfortunately can’t do it here,” Vieljeux explained, stressing the importance of avoiding fraud and “making sure the money goes to the right place.”
Donors can also review each charity’s performance report, submitted by the charities themselves, every six months. “They see what they give, where it goes and how it is used,” Vieljeux added.
On the day of the launch, the platform had already admitted and registered 50 charities and projects, 25 of which were already posted online, ready to join what Vieljeux calls a “revolution” in online giving.
“Social entrepreneurship is a growing phenomenon. It is really a big revolution,” said Vieljeux. “I believe the capital system is going nowhere and there is a new economy emerging, more circular and distributive.”
With this new economy also comes the concept of faster smartphone or tablet donations, especially during emergencies. Cause Direct plans to revolutionize emergency relief by launching a program at the end of this year that alerts a donor when disaster strikes, sending to their mobile devices a link to a donation page that lists all the NGOs that are working on the ground.
“It will help reduce the time of reaction to 48 hours, which is paramount in disaster relief, and all charities that receive funds will have to report every 15 days how they used them,” Vieljeux said.
While Vieljeux currently works with three other people on the platform, he intends to hire more professionals, including a business developer and an analyst, to create a team of 12 full-time employees by the end of 2016.
For the same year, Vieljeux also hopes to have six million site users, as well as an equivalent of 40 million dollars raised, with one clear goal in mind.
“My objective is to make people realize that they can indeed change the world. You have to try, you have to dare, but it is really a matter of changing your mindset,” Vieljeux said. “You can do fantastic things if you just put your mind to it.”