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Social Trends Impacting Online Fundraising
Social fundraising is becoming a buzzword within the cause space. The growing trend allows
citizens to create their own fundraising campaigns independent of, but still benefitting non-
profits. These efforts use a middle platform or set of tools to create grassroots communications
across traditional social networks likeFacebookandTwitter.
While Facebook and Twitter continue to dominate the general social networking space, there is a
need for middleware platforms to provide additional functionality when it comes to causes.
These solutions also incorporate traditional outreach mechanisms like e-
mail.Causes,Crowdrise,Jumo, andRazooare some of the early leaders empowering individual
fundraisers, donors and non-profits with grassroots functionality.
Obviously, people/orgs want to capitalize on the best feature of Facebook the wealth of
social data, said Holly Ross, executive director of theNonprofit Technology Network. Whatthey dont want to [deal] with is the Facebook UI etc. When Facebook is a platform and not just
a site, you get the best of both worlds. An additional feature is that some of these third-party
tools also integrate with your donor database, so you can actually track which of your supporters
are participating, and what that participation yields for you.
Heres a look at how these early leaders are starting to shape the social fundraising marketplace,
and some of the challenges the rise of middleware brings.
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1. The Rise of the Independent Free Agent
Because these platforms support individuals engaging in their own citizen philanthropy
activities, they are attractingfree agentspeople who want to operate outside the domain of a
501c3. These free agents feel empowered to fundraise for a cause they care about without
management. When their efforts are completed, a check is cut for the non-profit, and the
individual can walk away or choose their next project for the cause.
As independent philanthropists continues to rise, more influence may transfer to them, making
efforts and experiences a critical piece of the puzzle. Causes,a recent recipient of $9 million in
venture funding, is expected to move towards a more individual-centric experience over the
course of 2011.Philanthropy is going to become a more donor-centric experience, and non-profits will not be
able to own the donors, as people in the sector commonly say, saidMatt Mahan, the vice
president of social impact for Causes. Individual donors can talk to each other and discuss
whats working via the Internet. This creates more transparency, accountability, and a more
enjoyable experience with donors. And this will cause non-profits to become more responsive
and better.
2. The Importance of a Social Good Identity
At the core of the fundraising platforms approach to the individual is the concept of a social
good identity. Facebook and Twitter provide general identities for people, but they dont allow
someone to delve deeply into their philanthropic side. This lack of definition also prevents
opportunities to connect based on shared interest in social good.
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Whether or not theres a real market for a place to connect and explore social good identity
remains to be seen. Prior attempts at creating social good communities like
TechSoupsNetSquaredandIdealisthave done well within the causes space, but they have not
translated to the general public.
Several platforms like Crowdrise and Causes see themselves transcending that gap and breaking
into the general public marketplace. If Facebook is the platform where people assert This is
who I am as defined by who my friends are and Twitter is where people say This is who I am
as defined by what Im doing right now Crowdrise is where people proclaim This is who I
am as defined by what Im doing to make the world a better place, said Jeffrey Wolfe, co-
founder of Crowdrise.
3. The Challenge for Middleware Platforms
Social fundraising can be a challenge for non-profits. Often, while raising money for the cause,
there are fees ranging from 2.9% to 8% (credit card fees plus transaction fees). In addition, someof the platforms protect the individuals privacy and dont provide non-profits contact
information, denying them the opportunity to build a file of contacts.
Each platform has strengths and weaknesses in this regard. Some of the weaknesses from the
non-profits perspective are the very strengths that make the platforms attractive to individuals.
But generally, non-profits have to decide whether to plunge into the space and support it.
At the end of the day though, social fundraising will not be a silver bullet for raising money
for your non-profit, saidAllyson Kapin, editor of theCare2 Frogloop blog. Using multiple
channels (e-mail, your website, direct mail, telemarketing, etc.) to raise money will bring in thedough!
Razoo is differentiating itself by making its grassroots tools more non-profit friendly. We make
it incredibly easy for non-profits to raise money, giving them everything they need,
saidSebastian Traeger, CEO of Razoo. From the ability to tell their stories, to receipting
donors, handling refunds and customer support, to simple, robust reporting, to tools to empower
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peer and team fundraising to widgets to distribute throughout the web all with no setup or
monthly fees, and transaction fees of just 2.9 to 4.9%.
4. Team Focus for Social Fundraising
One unique development is the rise of teams in these platforms. Causes, Crowdrise and Razoo all
have added multi-person functionality to enable grassroots fundraising for groups of people.Whether its friends, competitive fundraising groups, offices, school clubs or civic groups,
people can now enjoy the autonomy of an independent grassroots platform not seen before in the
non-profit sector.
One example is musician Glen Hansardscampaign on Crowdriseto buy two much-needed
trucks for the Maasai Wilderness Conservation Trust (MWCT). People join the team as a show
of support and others join to fundraise. One person on the team put on a concert for her friends to
raise money, another did a bake sale, another offered to build websites for donors. Showing a
higher level of connectivity, two of the team members that had never met before just went to
Kenya together to volunteer for the MWCT.
Social fundraising, where fundraisers and charities involve their friends and supporters, is
incredibly effective, said Crowdrises Jeffrey Wolfe. It takes an individual team leader or
charity that inspires their squad to set personal fundraising goals, feel connected to the team, and
fully engaged in the campaign.
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Razoo is also putting resources into supporting teams: Since teams represent the future, we plan
to pour our efforts into making them more fun, social and easy, said Razoos Sebastian Traeger.
The Future?
The future of online giving is still uncertain. What is clear is the early market leaders will try to
cement their role in the space this year. The non-profit software market is defined by a few big
names and then oodles of niche product that fill very specific needs, said NTENs Holly Ross.
We see this in every single software type. So I think that well see these early leaders continue
to get more robust, but I see a lot of other players continuing to enter the space.
There is also hope that if successful, the social fundraising middleware platforms will not only
do well, but successfully grow online donations as a whole. Perhaps its an ideal, but it sure
seems worth the strenuous effort.
If we can power philanthropic identity, we can create more philanthropic activity because its
easier, said Causes Matthew Mahan. As people interact with each other, and see millions of
people interacting, it will become a more worthwhile experience. Its part of making the
experience more meaningful. We think this is a win-win, and that people will end up donating
even more.