social trends in online fundraising

8/4/2019 Social Trends in Online Fundraising

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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.

social trends in online fundraising

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