WEfficiency: A Crowdfunded Energy Efficiency Solution

Photo Credit: Blue Planet Foundation

Commitment to Action

WEfficiency: A Crowdfunded Energy Efficiency Solution

Commitment by

Blue Planet Foundation

In 2013, Blue Planet Foundation committed to develop and pilot an innovative efficiency funding program, called 'WEfficiency,' to help nonprofits unlock the benefits of energy efficiency. WEfficiency uses modern crowdfunding to create a new type of leveraged philanthropy, based on innovation, community support, and the extraordinary cost-effectiveness of energy efficiency. Blue Planet will develop an engaging site that allows nonprofits to easily broadcast proposed energy efficiency projects, including projected costs and savings. If the project receives enough pledges to cover the upfront cost of the project, WEfficiency will collect the 'donations' from the crowd to fund the project. The initial pilot will include energy efficiency projects at three Hawaii-based nonprofits.

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Overview

Summary

Commitment

WEfficiency: A Crowdfunded Energy Efficiency Solution

Launched

2013

Est. Duration

1 year

Estimated Total Value

$150,000

Region

Northern America

Countries

United States

Commitment by

Blue Planet Foundation

Partner(s) of the Commitment Maker(s)

YWCA USA, Atherton Foundation, State of Hawaii, Damien Memorial School, Hawaii Public Radio, Energy Industries, Hawaii Alliance of Non-Profit Organizations (HANO)

Details

APPROACH
Blue Planet commits to develop and pilot an innovative efficiency funding program, called 'WEfficiency,' to help nonprofits unlock the benefits of energy efficiency. WEfficiency uses modern crowdfunding to create a new type of leveraged philanthropy, based on innovation, community support, and the extraordinary cost-effectiveness of energy efficiency.
WEfficiency's crowdfunding solution is based on two principles of the internet age: (1) good ideas spread fast and wide; (2) diverse groups of people can join together to empower extraordinary change. WEfficiency tailors these proven principles to empower nonprofit energy efficiency projects. Blue Planet will develop an engaging site that connects nonprofit organizations with a diverse crowd of supporters. The site will allow nonprofits to easily broadcast proposed energy efficiency projects, including projected costs and savings. WEfficiency will make it easy for donors to browse those projects and pledge support, whether it is $10 or $10,000. If-and only if-a project receives enough pledges to cover the upfront cost, WEfficiency will collect those 'donations' from the crowd and fund the project.
These are not 'donations' in the traditional sense. Since energy efficiency projects pay for themselves, supporters will pledge non?tax?deductible 'investments.' These are essentially zero?interest loans, managed by the WEfficiency program. Participating nonprofits will be required to pay back that loan, using the energy savings and any available utility or government incentive rebates. Once those savings accumulate to equal the initial upfront cost, WEfficiency will offer donors three options: (1) receive their 'donation' back; (2) roll the funds over to help another efficiency project; or (3) contribute the balance directly to the nonprofit. This modern form of philanthropy will allow all donors, small and large, to control their leverage. For years afterward, participating nonprofits will reap the bottom line benefit of monthly energy savings while reducing their environmental footprint.
Blue Planet will apply its project management, technical, legal, and community engagement skills to develop the program, including the web platform, legal agreements and clearances, marketing, and efficiency project coordination and management. The initial pilot will include energy efficiency projects at three Hawaii-based nonprofits.
ACTION PLAN
The WEfficiency pilot program requires the completion of multiple components which will be developed through March 2014. The initial development phase to determine the legal framework of the loan model, develop project agreements and contracts, and structure the process for project identification will be complete by July 2013. Simultaneously, WEfficiency will work with stakeholders such as the State of Hawaii and Hawaii Energy-a state-contractor efficiency provider-to build a coalition of nonprofits and contractors. The online platform to connect nonprofit organizations with a diverse crowd of supporters will be finished by August 2013. The initial three nonprofit efficiency improvement projects will be identified by September, 2013, and agreements for each project will be finalized. Following completion of the website and backend logistics, a marketing campaign will be launched to promote WEfficiency and the initial projects. The goal is to obtain adequate loans and donations by December 2013 to initiate the nonprofit efficiency improvement projects. Each project's progress will be updated on the website-from initial funding through completion. Upon successful funding and execution of the initial projects, additional nonprofit efficiency projects will be sought and publicized for funding on WEfficiency by March 2014. Various approaches will be considered to scale WEfficiency and to make it financially sustainable. The initial development, pilot phase, and evaluation will be complete by September 2014.

Background

Nonprofits everywhere can harness the power of energy efficiency to benefit any mission, whether focused on the arts, human health, education, the environment, or another goal. But many nonprofits struggle to fund the upfront cost of energy improvements, unable to sacrifice today's onetime donations to fund tomorrow's energy savings.
With limited and dedicated budgets, nonprofit organizations are particularly vulnerable to rising energy costs. This situation is aggravated because nonprofits are often unable to take advantage of tax credits and other programs that promote sustainable energy solutions. Energy efficiency projects are a cost?effective first step to solving this energy conundrum. For example, a case?study energy audit of a well?known Honolulu nonprofit has shown that simple lighting improvements can reduce lighting energy needs, decrease air conditioning demand, improve lighting quality, and lower maintenance costs. The result is more than $4,000 in potential annual energy savings. A professional proposal for these improvements estimated the upfront cost at $11,000. Although the payback rate is less than three years, with an estimated internal rate of return over 40% over ten years, these costs are out of reach for most nonprofits. A for?profit business would use traditional financing to take advantage of this investment opportunity; however, nonprofits are often constrained to a different business model. All too often, upfront costs for tomorrow's energy savings must be paid from today's limited budget.

Partnership Opportunities

The Blue Planet Foundation is seeking financial and nonprofit recruiting support for the WEfficiency program. They are specifically looking for funding to incorporate a "gift-a-loan" web feature, where WEfficiency loans can be purchased and gifted to family and friends via email and social media. Blue Planet is also seeking regional support to identify and facilitate nonprofit projects outside of the state of Hawaii. They need someone to serve as a WEfficiency leader and point of contact for the requisite region. Finally, Blue Planet Foundation is seeking new organizations or individuals who are interested in joining the WEfficiency Hui -- an impact funding group that contributes to boosting project support and success through large matching "loanations," or donations that are paid over time with energy savings from the project.

Progress Reports

March 2015

Blue Planet has accomplished the goals of the CGI commitment. They have built the web platform www.wefficiency.org and completed the pilot phase, which helped successfully crowdfund the upfront cost of energy efficiency upgrades for the 3 Hawaii-based nonprofit organizations; Damien Memorial School, YWCA of Oahu and Hawaii Public Radio. They built upon the successful pilot round and funded both an additional energy efficiency project for the Boys and Girls Club of Hawaii and a second project for Damien Memorial School. This success is continuing with several nonprofit energy projects currently in development, along with refinement of the platform and outreach to additional potential nonprofit participants.

Blue Plant successfully funded five projects and raised $127,073 in crowdfunding for green initiatives (77% in loans, 23% donations) from 377 contributors. The anticipated energy cost savings for nonprofits totals $467,000 and the expected kWh reduction falls at 1,302,320 kWh, corresponding to a CO2 reduction of 1,114 tons. Every dollar spent in WEfficiency directly led to $3.50 in energy savings.

Blue Planet has developed all aspects of the WEfficiency program: they created project agreements and contracts; structured the process for efficiency project identification and contractor proposals; worked with stakeholders, such as Hawaii Energy (the PUC contractor that offers efficiency rebates), nonprofits, and contractors; built an engaging web platform that connects nonprofit organizations with a diverse crowd of supporters; created innovative marketing campaigns to boost program support; and developed approaches to scale WEfficiency and make it sustainable.

To develop their platform, Blue Planet worked with Sudokrew LLC, a Hawaii based web solutions company, to develop the core WEfficiency online platform. Under Blue Planet's direction, Sudokrew created a basic platform to (1) connect supporters, nonprofits, and energy contractors, (2) process and aggregate donations from the community, and (3) facilitate repayments from the nonprofit to the crowd. While this basic platform has proven successful in enabling energy projects, additional development work will make the platform more robust for projects involving larger numbers of supporters, and to frequently engage supporters as they track energy savings and project status/repayment.

Blue Planet has developed numerous partnerships to support and implement the WEfficiency program. For technical expertise and efficiency assessments, they have partnered with Energy Industries, Johnson Controls, and Honeywell Inc., three leading energy efficiency contractors. To broaden the reach of the program, they worked with the Hawaii Alliance of Nonprofits to identify and connect with nonprofits suited to participate in the program. To test the effectiveness of various outreach strategies, Blue Plant partnered with Hawaii Energy, a contractor that helped to fund tests of engagement strategies like match funding, perk prizes, social media campaigns, and community events. They have also partnered with the State of Hawaii Departmentof Business, Economic Development and Tourism to align WEfficiency opportunities with existing state efficiency efforts such as the Hawaii Clean Energy Initiative. At the WEfficiency launch event, the program received the support of Governor Abercrombie and Mayor Kirk Caldwell.

Blue Planet has also reached out to many nonprofit groups, with missions ranging across health and human services, education, the arts, and the environment. For the initial launch of the program, they selected three local nonprofits;Hawaii Public Radio, Damien Memorial School and the YWCA of Oahu. These organizations had mix of characteristics: they represented energy efficiency opportunities with short payback times, which was attractive to early adopters, offered high visibility, which assisted with marketing the WEfficiency platform during the launch phase to a wide audience of users, and engaged in diverse missions, which is now attracting growing interest from multiple nonprofit sectors. Other nonprofits are also engaged with WEfficiency to develop projects, including the Boys and Girls Club of Hawaii, the National Tropical Botanical Garden, the Waikiki Aquarium, Easter Seals, Shriners Hospital and others.

To develop marketing and awareness, Blue Planet engaged Sudokrew LLC to assist Blue Planet to develop and execute a marketing plan for the program'ss launch. Sudokrew's particular expertise is in web and social media-based marketing, with a focus on user engagement (i.e turning clicks into donations). Together, they ran various outreach campaigns across social media platforms, nonprofit communication channels, and community events. They were also able to test and analyze the effectiveness of each, to assist in the development of aplaybook to assist future WEfficiency nonprofits.

To date, WEfficiency has unlocked over $127,000 in clean energy loans and donations, which will save the four Hawaii-based nonprofits over $467,000 in energy cost dollars that will be put right back into making communities stronger. These projects will also prevent 1,114 tons of CO2 from being released into the atmosphere, avoid 88,000 barrels of oil from being imported to Hawaii, and advance towards a goal of 100% clean energy for Hawaii. Blue Planet is also working out the details on three new energy efficiency projects, which will enable an additional $1.3 million in energy savings for nonprofits. Furthermore, WEfficiency has enabled contributor dollars to be leveraged over 3.5 times, bringing added value to utilizing WEfficiency's philanthropic platform, and further illustrating the power of energy efficiency.

Blue Planet plans on continuing the WEfficiency project beyond the CGI commitment timeframe. They are continuing to build a queue of nonprofit participants, and plan on expanding the WEfficiency program to allow for an unlimited number of nonprofits in Hawaii and beyond to benefit from the power of energy efficiency.