Philanthropy Goes Direct

We recently ran a successful GoFundMe campaign on behalf of a client whose sole company truck, loaded with inventory, had suddenly gotten smashed in a near fatal highway accident. Thanks to God, first responders, good hospital care and GoFundMe’s regiment of donors, he is back only a few months later, feeling much better and restoring his business.

As harrowing as that dark night and as miraculous as that resounding response both were, either was only a tiny fraction of the passion GoFundMe rallies in response to crises: $1.4 million raised daily on average according to its website from its 25+ million donors recruited since 2010.  That truly is a force to be reckoned with, and, combined with the partisans of GiveForward (beginning 2008), Crowdrise (2010, just 9 days after GoFundMe), YouCaring (2011) and other successful donation-based online crowdfunding platforms, it’s a global army that has raised a combined total in the billions of dollars.

While only a contributing factor in light of the economic recovery since the 2008 recession and significant increases in large-donor giving, crowdfunding platforms have helped achieve some record-setting philanthropy statistics, such as the number of people donating to non-governmental organizations increasing by 200 million from 2011 to 2014 and record rises in American giving from 2014 projected into 2017.

Social and mobile technology have been a key factor in crowdfunding platforms because they enable the donor to bypass institutional intermediaries and give directly to the recipient. In essence, giving directly has become the battle cry of high-tech philanthropy. But the revolution is only beginning. Just as the Internet has bypassed publishing houses and media companies, it is also bypassing philanthropic institutions.

The Rise of Relational Giving

 The most effective fundraising has always been relational. As any alumni director will tell you, the most loyal givers donate the largest amounts based directly on how deep their relationships are with the beneficiary. Because of this, relationship fundraising has followed relationship marketing since its development in the 1970s. It was only in that decade that the concept of the “nonprofit sector” came into being, even though charitable organizations have been around for thousands of years.

One of the oldest, the Christian church, was the central intermediary of American giving for most of the nation’s history. In the 1950s, for example, millions of Americans donated to local churches on behalf of “starving kids in China”1 and other global causes because the church was one of their only conduits.

Eventually, though, other organizations like Compassion International gained prominence by adding a relationship component, not with the intermediary, but with the beneficiary. Now instead of faceless causes, donors could begin a relationship in which they directly sponsored, in this case, an impoverished child in a developing country, with the parachurch providing regularly updates replete with photos and handwritten thank-you notes.

Social media makes going direct easier than ever before. Our client raised money, not just from friends and family, but from people all over who empathized with his story. With social channels connecting the world like never before, empathetic stories are traveling faster than ever.

Game-Changer #1: DonorsChoose.org

But what’s the role of institutions as relationship fundraising continues to evolve? I asked Charles Best, founder & CEO of DonorsChoose.org, one of Fast Company’s “50 Most Innovative Companies in the World,” which is “connecting the public to public schools.” As a teacher in the Bronx, he realized that the educational bureaucracy—not lack of funds—was his biggest obstacle in sourcing needed supplies to his classroom. He decided to go direct.

In 2000 after making photocopies of the single copy of Little House On the Prairie he had been able to procure, he built a website where teachers could post classroom project funding requests, which tended to be simple: books, supplies, sports equipment, etc. After secretly funding the first 11 requests posted by his eager colleagues for a few hundred dollars (much of his savings!), word of this “crowdsourcing answer” spread to actual crowds which have grown to include 2.5 million donors who have contributed $519 million to help 22 million students.

In its early days, even Charles thought surely there was some role for the institution. Funding requests would need to be reviewed by experienced teachers who would evaluate their educational value. But soon, a bottleneck arose: a ten-hour turnaround when teachers were paid to review. Once this requirement was eliminated, though, and reviews were crowdsourced for free, that turnaround time plummeted to a mere 90 minutes. The lesson with Charles was to streamline and get as many requests directly in front of prospective donors as he could.

As a result, he’s now attracting project funding from donors who initially didn’t consider education within their mission. For example, when interviewed by Fortune Magazine, the writer confessed his personal passion was helping salmon in the Pacific Northwest, a cause seemingly unrelated to public education.

But before the reporter left the room, Charles ran a quick search for “salmon” in DonorsChoose.org and generated five separate, relevant classroom projects, including one for an Oregon school trying to source hip waiters for students to maintain a salmon hatchery created by their high-school teacher. The reporter ended up helping to fund the project.

As a result of going direct, Donor’s Choose is changing educational funding in three key ways:

  1. By removing the barriers of “the educational industrial procurement complex” that prevent innovative companies from selling educational products through traditional channels. DonorsChoose.org is providing classroom innovations from stand-up desks to remote-controlled submarines.
  2. DonorsChoose.org has hired a data science team to analyze the data of what front-line teachers really need as well as the giving patterns under which donations occur. This unique data can improve budgets, funding requests and classroom quality nationwide.
  3. DonorsChoose.org is providing funding credits based on teacher performance which could offer a “third way” between those championed by education reformers versus those of union leaders to reward teaching excellence. Like merit pay, but with a different currency, these funding credits “speak to teachers’ hearts rather than their wallets,” according to Charles.

But Charles Best is not the only crowdfunding reformer and public schools aren’t alone in the transformation. In our next issue, we’ll look at an app that provides a similar funding platform for international aid workers and the government agency that has banned it. We’ll also look at how bots could make going direct even cheaper and more data-driven.

 

1 Interview with David Bowser, former Senior Analysis & Design Specialist, Compassion International, Colorado Springs, September 2009.

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About NSI Partners

A digital marketing company with almost two decades of experience, NSI Partners helps clients achieve robust results in search marketing, social media, and other digital marketing spaces.

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