How Better B&B™ is capitalizing on the sharing economy to deploy a global model for sustainable philanthropy.

by Harold Graham 3/7/2020

Status of the Sharing Economy

The sharing economy is growing without an end in sight.  In a 2015 report PWC predicted the sharing economy would grow from $15 billion in 2014 to $335 billion in 2025. Actual numbers show these estimates to be low.  Quicker than predicted, we’re shifting to a world of the sharing economy. 

A recent article in Forbes alludes to more businesses integrating their products and industries to the sharing economy, “Underutilized assets are abundantly available in a world with too many people that have too many things. As smart folks have begun to figure out, sharing lonesome assets kindles economic growth, turns stale resources into money and relieves cost burdens of ownership while chaperoning sustainability.” 

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A Shift in Global Philanthropy, Millennials and Gen Z’s

Gen Z’s and Millennials give more than twice as much to charitable causes compared to baby boomer or Gen X’s.  Most Gen Z’s and Millennials earn less in real dollars than their predecessors, are burdened with increasing student debt and are years away from owning a home, so the fact that giving is a priority to their group as a whole is very encouraging.

When examining Millennial giving statistics, we see an important shift away from the philanthropic patterns of previous generations. The traditional “Donor Pyramid” is no longer effective, most philanthropic organizations recognize that reliance on wealthy donors giving large lump sums is no longer viable.

This giving data indicates millennials give more online, in smaller amounts and to charitable groups aimed at relieving suffering rather than to traditional philanthropic organizations and in their purchases of products and services focused on sustainability and philanthropy.  We see the success of companies with a strong focus on purpose and affecting global issues around poverty and the environment.

The latest “Millennial Impact Report” is evidence that Millennials and Gen Z’s prefer to utilize the power of collective action; acting as individuals can create as significant leverage as a larger group. 

Merging the Data to Create a Global Model for Sustainable Philanthropy

In reviewing the data, several concepts emerge:

  • The sharing economy is in a period of massive growth
  • Millennials and Gen Z’s utilize sharing economy services
  • Global philanthropy has shifted
    • Millennials and Gen Z’s are the force behind the shift
      • Smaller donations
      • Cause and movement based
  • Millennials and Gen Z’s have created a new paradigm in giving
    • Giving more than previous generations
    • Giving in smaller amounts
    • Focused on Causes and Movements
  • Millennials and Gen Z’s are the largest demographic of consumers in world history

Sustainable Philanthropy is defined as charitable giving that continues in perpetuity.  The old model of philanthropy requires an expensive and time-consuming process of constant engagement with donors to ensure the philanthropic organization’s survival. 

The goal of sustainable philanthropy is to create passive processes whereby donors engage with the philanthropic organization in conjunction with their normal activities; thereby including small donations as part of their interaction outside goods and services who choose to include philanthropy in their business as a value add to consumers.

An example of Sustainable Philanthropy would be a symbiotic relationship between businesses, products and services who wish to include “doing well by doing good” in their business model who add a philanthropic component to attract Millennial and Gen Z consumers to their brand. 

As consumers engage with these brands donations are made to philanthropic entities with very small cost of time and capital resources to the philanthropic entity.  In return the philanthropic entity can choose to market the cooperating brands to their donors driving consumer traffic to the brand, a win-win scenario for all involved.

A “Better” Model for Sharing Economy Hospitality and Sustainable Philanthropy

Better B&B™ is a sharing economy hospitality booking engine for the 21st Century. To provide a better understanding of the sharing economy market for hospitality; Hosts who wish to share their homes or a portion of their home for profit can create a listing on Better B&B™ with an advertised nightly rate.  Guests who want an immersive experience in the communities they visit can book accommodations on Better B&B™ in a Hosts home of their choosing.  This model exists in several booking sites including: AirBNB, Booking.com, VRBO, Expedia etc. Better B&B™ has multiple differences in fee structure, most significantly the link to philanthropy.

Better B&B™ Hosts provide a minimum 10% donation to the philanthropic entity (on Better B&B™ called Affinity Group) of their choice on all transactions for nightly accommodation rental.  The Host making the donation is an important distinction as this empowers the Hosts in a fully transparent manner to connect with the Philanthropic entity of their choosing; this process also complies with Federal marketing regulations around philanthropic fundraising.

Based on new technology developed by Stripe® for Better B&B™ the funds from each transaction for nightly rental are sequestered when charged at the time of booking; Hosts receive 90% and the Host’s Affinity Group receives a minimum 10% of the total charges. Guests can also give additionally at the time of booking to any Affinity Group on the Better B&B™ platform.  The only caveat is 10% donations are NOT refundable.  Better B&B™ Hosts have their own rules for refunds on accommodation, however the 10% donation cannot be refunded.

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Most shared economy booking platforms charge their Hosts a minimum 15% commission for bookings through their sites.  Unlike most other platforms, Better B&B™ does not charge ANY transaction fees; ensuring Better B&B™ Hosts profits are not reduced by cutting 10% off the top to their Affinity Group.  Better B&B™ charges Hosts a $30 flat monthly fee to list on the platform with no additional fees.  Better B&B™ Affinity Groups participate completely free of charge.

Another relationship synergy; Affinity Groups on Better B&B™ must be a registered 501c3 with the IRS, Hosts (see your tax professional) can receive a US income tax benefit for their donations.  Depending on the income tax status of the Host (see your tax professional) this has the potential to reduce taxes owed on income from short-term rental of their properties, or taxes owed on management income for property management companies.  Elimination of transaction fees combined with a potential reduction in tax on income makes the 10% donation a strong benefit rather than a detractor, hence Sustainable Philanthropy.

Conclusion: A Model for All to Build Upon

This model has the potential to be replicated throughout the world in nearly any sector when supported by consumers who buy with their heart as Millennials and Gen Z’s are doing.  When a small incremental charge is added to an at par service with a similar price tag, the product connected to philanthropic efforts will win.  If every sale is emotionally driven, this new model for adding small incremental charges to facilitate philanthropy is going to change the face of philanthropic fundraising forever.  The sharing economy is where this model began, I’m looking forward to reporting on the next sector to heed the call.

Copyrighted, Proprietary & Confidential property of Better BnB Partners, LLC  2020