Philanthropy 2.0: Giving In the Digital Age

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Philanthropy 2.0: Giving In the Digital Age

Raising funds for charity once meant schlepping to venues, dealing with caterers, finding people to fill seats, piles of paperwork and months of planning. On smaller scales, it involved selling candy bars in front of CVS or standing on street corners with a laminated picture of a Hmong woman, and invariably talking yourself hoarse to people whose eyes glazed over as they half-listened.

We still see these older models of fundraising in plans by bored Upper East Side socialites and underfunded soccer teams. And every Christmas, including this past year, shoppers pass the clanging bells of the Salvation Army’s dogged volunteers. But another way to give requires nothing more than a mouse click. Instead of relying on galas, clipboards and clamoring bells, we have Facebook pages and Kickstarter campaigns. Donating money is as simple as sending a text or clicking a button — thanks, PayPal — and it’s easier than ever for worthy causes to find a platform. And since young people prefer this digital way of donating, the smartest thing a charity or non-profit organization can do to fund its future is log on and sign in.

How popular is online giving? It’s still far from the most prevalent form of charity, but it’s definitely on the up-and-up, as shown by fundraising website Convio’s 2011 report describing a surge in online donations, with contributions growing around 20 percent that year. And since young people prefer rooting out charities and NGOs online and through social media instead of face-to-face, online giving will continue to climb in popularity as tech Luddites step out of the workforce and Twitter-loving up-and-comers get more purchasing power.

Giving With Apps

Charities and churches are moving to mobile donations. The Salvation Army is the most visible example of giving, with its traditional red-bucket campaign featuring bell ringers positioned in strategic shopping locations. Soon, you can make contributions by swiping a credit card, signing the touch screen on the smartphone and then deciding if you want the receipt sent via text or e-mail. The program, which launched in November, can also collect contact information for future fund-raising campaigns.

“A lot of people just don’t carry cash anymore,” Maj. George Hood, the Salvation Army’s spokesperson, told the New York Times. “We’re basically trying to make sure we’re keeping up with our donors and embrace the new technologies they’re embracing.”

The pilot replaces an effort with traditional credit card terminals placed near its well-known red kettles. That test only generated $60,000 of the $142 million received nationwide. It’s betting that its partnership with Square, which uses a small credit card reader plugged into an Android device, will prove more popular and convenient for holiday shoppers.

Square competes with near-field communication, or NFC, technology, which often requires specially equipped phones and merchant readers. NFC is behind the Google Wallet app, now available on select smartphones, which lets you touch a payment terminal to transfer funds. NFC is also being tested by a 140-member-strong carrier consortium called Isis, which offers a rival service to Google Wallet. NFC is also gaining traction with church and charity groups like “MobileCause,” which worked with 1,000 charities to set up mobile giving programs.

“People forget to bring their checkbooks, so using the phone makes sense,” Douglas Plank, MobileCause’s CEO, told Computerworld. “The ministries that have tested it see a 10 to 15 percent bump in giving when they do it.”

Meanwhile, Augusta, Ga.-based Stevens Creek Church introduced smartphone giving through “SecureGive,” one of the first charity apps to hit the Apple Store.

“In addition to traditional ways of receiving charitable donations, churches are now using mobile apps to make giving to their ministry accessible wherever they have their phone,” Marty Baker, the church’s pastor, said in a statement. “Churches and non-profits have to consider new ways of collecting funds this holiday season. It’s time to embrace a new way to give.” SecureGive gives you a fast and easy way to give with a smartphone. You can also setup a one-time or recurring donation using a bank card or routing number.

The success of mobile giving won’t be fully understood until early next year. Until then, churchgoers who have previously been told to turn off their phones are increasingly being told to turn them on. Soon, non-profits will ask you for your phones too, instead of your cash or checkbook.

Follow the Crowd for Easy Donating

Talking about a hip hop yodeling passion project or yearning to make organic straw shoes for baby Namibians? “Just Kickstart it!” goes the chorus. In 2012, crowdfunding permeated mainstream media like never before. Sites like Kickstarter and Indiegogo let people raise money and visibility for projects of all sorts, ranging from consumer products and artistic endeavors to more purely altruistic causes, like raising money for disenfranchised or ill people as well as start-up capital for not-for-profit organizations. And they’re easy to use, with friendly, streamlined designs and incentives to make giving fun.

Crowdfunding feeds dreams both basic and implausible with a steady stream of cash, and since donors get to see campaign photos and videos and hear the detailed stories, they feel as connected to their digital do-gooding as they would stuff dollars into a gas station collection jar for the local softball squad.

There are resounding success stories, like the so-amazing-it-must-be-true tale of Caine’s Arcade, which used crowdsourcing to assemble a group of people to make an entrepreneurial boy’s dream spring unexpectedly into reality, eventually evolving into the Imagination Foundation, devoted to helping young people realize their dreams. These sites are not without drawbacks. Many projects do not receive funding, which isn’t always the platform’s fault, since responsibility for promoting the project falls on its creators. And some fully funded projects do not come to fruition, leaving the donors feeling ripped off. For instance, three years passed since donors gave money for a musician from the band Animal Collective to go to Mali in 2009. They were told they would receive gifts like a CD of the sounds and music recorded on the trip, but they continue to wait for these items.

Crowdfunding’s lack of accountability means gifting large sums of money is sometimes a risky move — people receiving the money are not obliged to give you what they promised. Though this doesn’t often devolve to “take the money and run” scenarios, sometimes the people raising money get set back and do not deliver on their pledges on time. Still, though cases of failed promises continue to emerge, donations to these sites show no signs of slowing. In 2012, Kickstarter raised over $112 million, nearly three times what it raised in 2010 and 2011 combined.

Send the Cure for Cancer a Friend Request

Chances are you can find somewhere to give by scrolling through your Facebook Timeline. People frequently post about their fundraising attempts on social media sites like Facebook and Twitter. Every November, many social media users see their Newsfeeds and streams flooded with posts of newly mustachioed friends, urging them to give to “Movember,” a fundraising movement that uses mustaches to raise awareness and money for prostate cancer research. Their efforts work, partly because their friends don’t want to stare at their unevenly hairy upper lips, but also because they create a more familiar community to make it simpler to give online. And it’s not just people using social media to drum up support.

During disasters, you can now use your mobile phone to give to major charities like Red Cross, which came in handy during Hurricane Sandy and other recent calamities. That means you can give anytime, anywhere instead of sitting down to write a check or coming face-to-face with people seeking donations. Giving is as simple as voting for an American Idol. And introducing text donations is helping organizations like the Red Cross keep raking in money despite troubled economic times. A Pew survey highlights how offering text donations draws in people who give spontaneously or without heavily researching the situation. Nine percent of adults in the U.S. have donated through text message, and as people grow more accustomed to spending money with their smartphones, this number is likely to increase.

Facebook debuted its Gifts function in late 2012, and though it isn’t making many waves, you can give to eleven charities, including the Boys & Girls Clubs of America, Kiva, Oxfam and others. Will it be more popular than the site’s ill-fated “causes” feature, which few noticed? It’s too early to tell, but Facebook’s continued attempts to build philanthropy into its platform implies it recognizes that people are using it to raise money on a personal level, and wants them to extend those sentiments into a more structured system.

Ignore the Banks, Lend a More Direct Hand

If you’re more interested in giving to people instead of projects, a number of websites let you directly help struggling entrepreneurs by investing in them. Instead of simply donating money, you can lend people in need money at a fair rate and have them pay you back, which empowers people who do not qualify for bank loans get the start they need. That type of philanthropy is called micro-finance, and there are many sites available. Kiva, the largest and most well-known site, partners with micro-finance organizations in different countries to facilitate small loans for entrepreneurs in developing nations.

However, the financial institutions Kiva partners with still charge high interest — for example, one man’s investigation found a 47 percent interest rate charged by one of their partners in Uganda. That’s where smaller programs like Zidisha, which focuses more narrowly on countries in Africa, including Senegal, Kenya, Burkina Faso and a few others, come into play. Zidisha lets users directly loan their money to people without going through financial institutions or other micro-finance programs, so the thickest slice of money possible finds its way to the people it’s supposed to reach, and donors can directly interact with the people they give help to.

Kiva serves a wider base and funds over $330 million in loans, but Zidisha’s intensely person-to-person set-up may appeal to those who want more money to funnel directly to those it aims to help. Micro-finance is gaining steam, but it’s not without detractors. Some studies poke holes in its impact, although supporters counter these studies are too limited and do not look at the big picture. Either way, if you want to give to these sites, there’s a very good chance you will get your money back: Kiva’s repayment rate is above 99 percent, while Zidisha’s is 98 percent.

Roll With the Jubilee

The ill-fated Kony 2012 online fundraising efforts demonstrated how non-profits can leverage social media and viral marketing to rake in donations. Although things didn’t work out as intended in the Kony 2012 efforts, the up-and-coming altruistic Strike Debt campaign is organizing what it called the Rolling Jubilee, where organizers raise money to buy debt and forgive it, and could be a bellwether for involving young people in fundraising in 2013. As Charles Eisenstein explains in his Guardian article lauding the effort, “it is a plan to use money from donations to buy distressed consumer debt from lenders at a marked down price, just as debt collection agencies normally would.”

Strike Debt” is a new non-profit organized by young people, and while its progressive message is unlikely to inspire right-wing Millennials, the social-media-centered fundraising structures it chose is likely to serve as a blueprint for fundraising of all political stripes in the future. After you give to the cause, or even if you haven’t, Strike Debt provides you with a few ready-made tweets, so you can select one and spread the word. The attention paid to social media marketing indicates how crucial to their success the organization regards these sites.

Avoid Scams

It’s easier to give than ever, but it’s also easier than ever to trick people — and you don’t want to become the Manti Te’o of the philanthropic world. The Internet is a shyster’s picnic, brimming with novel ways to rip people off. It’s hard to figure out which philanthropic options are genuinely good and which ones are shadier than the Human Fund from Seinfeld.

In the wake of disasters, exercising caution before clicking is a good idea. After the Indian Ocean tsunami in 2004, scammers flocked online to prey on the good intentions of people looking to help, and this deception tends to follow other catastrophes like a shadow. And no matter how much you give online, tossing a few dollars in those bright red Salvation Army collection tins around the holidays never hurt anyone. At least, as long as they’re around. As online fundraising and activism continues to grow, face-to-face and mail-in efforts may fade into the past like physical CDs and Friendster.

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