Tag Archives: kiva

Enabling Donors to Choose How Money Is Used

This week I was invited to take a look at GiveLoop, a new software platform for processing online donations.  Inspired by sites such as Kiva and DonorsChoose, GiveLoop allows nonprofits to empower constituents to decide exactly how their donations will be used by ‘voting with their money.’  Benefits for the nonprofit are to increase donation size, increase donor loyalty and increase donor volume, as well as providing more transparency.  If you’ve looked at direct mail appeals you’ve received lately, you will probably notice how donation levels are often associated with what each amount will allow the nonprofit to do, but doesn’t obligate the organization to use the funds for that purpose.

While GiveLoop offers an interesting new way to do online fundraising, most organizations I’ve worked with have been wary of collecting restricted funds, partially due to the accounting requirements and partially because they really don’t want to give constituents this level of control.  But this reminds me of the difficulty some nonprofits have had in embracing social media because they want to control the messaging.  But as Clay Shirky pointed out at last year’s Nonprofit Technology Conference, ‘you’ve already lost control.’

However, I like the idea of GiveLoop as continuing the recent trend of giving donors more information about what their money will be used for, and then reporting back on how the donations were actually used.  GiveLoop also tries into social networking, although co-founder Todd Spitz told me that it was too early to tell whether constituents who have given through GiveLoop have been successful in becoming fundraisers for the causes they support.

For a nonprofit that is considering using a product like GiveLoop, a question to ask is whether the organization is really interested in listening to their supporters, or if they are doing it simply to raise more money.  If it’s the latter, then the effort is less likely to be successful as constituents will eventually realize that their input is not welcome.  There also needs to be full transparency about what will happen if the requested funds for a specific project are not raised;  will the balance be made up by another donation source or will the donor be asked to consider supporting another initiative?

Interestingly, GiveLoop’s FAQ clearly states that the nonprofit is not obligated to use the money in the way donors select.  But to make the most of this type of program, an organization clearly has to be willing to give constituents a much greater role in how funds are spent, similar to why it’s so important to listen first in social media and not simply treat it as another way to send out nonprofit updates.

Fundraising Tips / New Attention on Kiva

Many articles lately on how supporters can be your strongest fundraisers: In Understanding the New Breed of Digital Donor,  Fundraising Success demonstrates how social media is enpowering supporters to fundraise on their own, with minimal involvement from the nonprofit they support.  In Enlisting Your Supporters to Fundraise For You, Idealware describes how friend-to-friend fundraising can be used.   In Donors Give Most When Friends Ask, AFP reviews a recent study on large gifts and reaches the same conclusion.  (Thanks to Kivi Leroux Miller for highlighting nonprofit communication recently.)

Congratulations to winners of America’s Giving Challenge, proving that even the smallest nonprofits can compete with the larger organizations by taking advantage of social media tools such as Facebook’s Causes application.  Social media guru Beth Kanter agrees.  Nten also offers ideas on how to Raise Money on Facebook.  See also Clicking for a Cause for more thoughts on how social media can help engage constituents and encourage  involvement with your cause.

David Roodman’s recent blog post and this week’s follow up NY Times article, questions are raised about the model of newer nonprofits such as Kiva and Global Giving which have supposedly allowed donors to decide specifically how their money will be used.   This has resulted in a recent change in Kiva now describing its mission as “connecting people through lending to alleviate proverty.’  My take – this shouldn’t stop the trend towards nonprofits giving donors more of a say in how their contributions will be used.  However, it does provide a wake up call on the importance of transparency in explaining how the process works.

How to Attend a Conference – Web 2.0 Style

This week I’ve participated in the International Fundraising eConference which has demonstrated a completely new way to learn more about ephilanthropy strategies.  There is no physical location;  all sessions are online and are recorded so that if you can’t attend in person, you can watch/listen whenever it is convenient.  There are attendees from all over the world.  Online discussion boards have been created to continue a dialog beyond the sessions, which have been offered at multiple days/times this week.  While I miss the opportunity to personally meet many of my peers, I’ve enjoyed the opportunity to participate at my convenience.

This morning I attended an excellent workshop on Community Fundraising led by Bryan Miller of Cancer Research UK.  He offered many examples of how we can help our supporters to help our nonprofits by engaging in their own fundraising initiatives.   In response to my question on how traditional nonprofits can maintain some level of ‘control,’  he suggested that we provide quality content to describe what our organizations are doing, which constituents can then use to ask for support.  Bryan also suggested that we seek out who’s already committed to our causes (e.g. look for your organization’s name on Facebook to find out how many pages have already been setup) and help them to use social media tools to spread the word and raise money.

Bryan also introduced the concept of crowdfunding, offering many examples of innovative event and cause specific fundraising at sites such as Kiva, Global Giving and a soon to be launched See the Difference.   Anyone can do fundraising now;  you don’t need your own web site, you don’t need strong technical skills.  In today’s difficult economic times, you can help someone save their home using Small Can Be Big. He also suggested a new focus in fundraising:

  • from contact lists to communities
  • from campaigns to developing strong content
  • from campaign managers to community managers

Even a large retailer like Target, which has always been a large supporter of nonprofit causes, uses Facebook to help it choose which organizations to support.

The eConference continues through today but registrants will have access to the sessions and discussion boards for the next six months.

New Competition for ‘Traditional’ Nonprofits

While reviewing an online donation form recently, I came across this default question: “keep me informed about how my gift is being used.”  This seemed like an opportunity to find out exactly how a donation would be used by our organization. e.g. to support research, to sponsor an event, to provide constituent service.  However it turned out that this question was actually intended as an opt-in for email communication.  Needless to say, I advised that we revise the language so the constituent isn’t promised something that we aren’t prepared to deliver.

Yet in a recent Chronicle of Philanthropy article, Give and Take (subscription required), many new nonprofits were profiled that can tell donors exactly how their funds are used by allowing constituents to contribute directly to a project of their choice.  This trend is referred to as ‘direct giving’ or ‘peer-to-peer philanthropy’ and is utilized by organizations such as GlobalGiving, Kiva, DonorsChoose and ModestNeeds.

These nonprofits are maintained through mostly optional fees added to the donation, although GiveMeaning is trying the advertising route. Since none of these organizations are self-supporting yet, it’s unsure whether this concept will survive and, if so, which of these charities will remain.  However, the ability to donate directly to a cause is an area where many traditional nonprofits cannot compete, especially when donations for specific causes are discouraged so funds received are not ‘restricted’ in their use.

Without the Internet, this type of philanthropy would not exist.  Make a donation to one of these organizations and see how your constituent experience compares to what you’ve received from most traditional nonprofits.  For a profile of these types of sites, visit Peter Dietz’s Social Actions

Notes from Fundraising Day, ePhilanthropy Symposium

I joined over 2000 colleagues who help nonprofits raise money at Fundraising Day last week.  Some takeaways:

Mark Rovner offered these tips:

  1. Ask When the Time is Right – when your organization / cause is in the news
  2. Avoid the Constant Ask
  3. Synchronize Your Channels – direct mail, email, web site
  4. Avoid ‘Soft Asks’
  5. Ask for Feedback – surveys, online focus groups
  6. Finish the Story, Close the Loop – don’t ask again after donation before informing how past donation was used
  7. Don’t Ask for the Wrong Amount – know what levels your donors have previously gave
  8. Recognize Cross Channel Behavior – many will donate online after receiving direct mail
  9. Make Sure You Thank More Than You Ask
  10. Test – Find Out For Yourself

Tom Gaffny demonstrated the value of asking for a specific amount for a specific purpose, rather than simply requesting a ‘general donation.’

A day later, I attended the ePhilanthropy Social Networking Symposium, where we debated the value of social networking tools to nonprofits.  Some highlights:

Steve MacLaughlin, Blackbaud‘s Director of Internet Solutions suggested that we ‘experiment first, plan later’ to make sure our organizations are represented in these new web environments.  He suggested a POST approach:

  • People - who are you targeting?
  • Objectives - what do you want to achieve?
  • Strategy - what will it look like when you’re done?
  • Technology - what tools will you use?

Philip King of Artez Interactive suggested the value of recruiting fundraisers instead of donors, and suggested that the ‘from’ line in an email will often be more important than the ‘subject’ line;  i.e. people give because of their relationship with people, not necessarily because they support the cause.  He also discussed the ‘game changing idea’ of Kiva, where people can donate without going through a nonprofit organization;  Oxfam Direct has also used this technique successfully.

To keep up with latest trends, many speakers mentioned the value of following sites such as Beth Kanter’s blog.

Using Social Networking Sites to Attract Constituents

At the quarterly Not-for-Profit Webmaster Round Table meeting this week, I initiated a discussion on social networking, stimulated by Tuesday’s Wall Street Journal article, A New Generation Reinvents Philanthropy. In addition to the popular MySpace and Facebook sites, the article mentioned many new ways in which our supporters are finding to raise money for their favorite causes.

David Milner, who has run the webmaster group for several years, raised an interesting question.  If pages are created on these new sites and successfully generate interest in the organization, this will hopefully increase traffic to the nonprofit’s main web site.  But if the nonprofit maintains the MySpace and Facebook sites while neglecting its own web site, how will this come across to the constituent?  I also asked – how does the nonprofit decide which content to put on these sites while making sure there is consistency with its own web site?

The social networking sites present an interesting opportunity for us to engage a new audience.  It is likely that visitors will seek out an organization on these new networks before visiting an organization’s main web site.  So we’ll need to make sure that our nonprofits have a presence on these new sites while also keeping our own web sites fresh.  This will be a challenge, but it’s easier to go where our constituents are than hope that they’ll find our organization web sites.

In addition to MySpace Impact and Facebook’s Causes, other sites mentioned in the article that are attracting interest especially among younger constituents include Change.org, DoSomething, Firstgiving, GiveMeaning, Kiva and SixDegrees.

Innovative ways to use technology in nonprofits

Spent some time recently at the Foundation Center (a great resource for information about nonprofits) and scanned articles from the Chronicle of Philanthropy.  (While the web is wonderful, sometimes it’s nice to be able to read through a written publication.)  Below are some organizations using technology in interesting ways, some which have been around for many years and others that are new:

  1. Change.org – 2007 – social network for variety of causes
  2. Donors Choose -  2000 – helps school teachers
  3. Genocide Intervention Network – 2004 – end genocide
  4. Give Meaning – 2005 – donations for specific projects
  5. Invisible Children – 2004 – helps kids in northern Uganda
  6. Kiva – 2005 – small loans to entrepreneurs in developing countries
  7. Nothingbutnets – 2006 – ‘send a net to save a life’ in Africa
  8. Rednoseday – 1988 – comic relief in UK & Africa
  9. Takingitglobal – 1999 – online community for young people

Also see Squidoo’s list of the 59 Smartest Organizations Online, which includes some of the above nonprofits.

These are great examples of how to raise money and support social causes with technology in new and exciting ways.  Take a look.