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Fundraising in a Networked World

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Fundraising is surfing a sea change. The rapid rise of the Internet means that individuals are being given the tools and becoming empowered to take a stand for their favourite cause more than ever before. A contributed article from Everyclick.

Membership organisations reliant on traditional fundraising techniques may soon become a thing of the past. In a socially networked society, organisations need to stay abreast of these changes and align with the needs of the digital citizen who recognises:

"individuals can now place themselves at the centre of their own online network and shape their virtual world around their personal identity and interests."

In How online communities can make the net work for the VCS, published by the NCVO’s ICT Foresight think-tank, Megan Griffiths says it’s vital to recognize that the balance between donors and organisations has shifted irrevocably. Instead of having to make monthly or yearly donations to align with a charity, individuals can now use the Internet to from their own ‘membership’ groups for their favourite causes.

In a warning to CEOs, directors and charity trustees, the report says that in today’s technology-literate society some organisations risk losing out with power moving "from top-down hierarchical organisations and towards more fluid and participative networks where there is less need for a centralised ‘bricks and mortar’ coordinating organisation". This shift in social participation represents a seismic upheaval for traditional membership organizations.

From members to supporters - the fundraising Long Tail

Not-for-profit blogger David Wilcox questions whether membership will become obsolete:

"It used to be that you joined associations because it was a way of meeting like-minded people and getting help, facilities, information and other things difficult or costly to organise for yourself. These days it is much easier to find people and resources online".

The challenge for fundraising teams is how to ensure that individuals who are sympathetic to your cause want to include your organisation in their personal network. Moreover, it is a challenge that receives scant attention in the report. While the report suggests using social networks to share information with donors, one core issue it fails to address is how charities can use networks to raise funds directly - an odd omission given this activity is the lifeblood of the charitable sector.

At the heart of the challenge is the requirement for fundraising managers to stop seeking out small numbers of high-value donors and to tap into the internet’s fundraising long-tail.

In a nutshell, the Long Tail theory - the economic theory first coined by Wired magazine editor, Chris Anderson - argues that organizations with great distributive power can connect with the much greater number of people who donate small amounts of money than the smaller number of people that become donate larger sums of money. The latter are membership organisation’s traditional donors.

This idea will no doubt scare fundraising managers relying on one-off large donations for income, but evidence shows that spending time to connect with the much larger pool of smaller, part-time donors may actually be more beneficial in the longer-term.

Research shows charities that cultivate small donations from supporters are most likely to receive big bequests from the same people, according to Peter Panepento from the Give and Take blog. He highlights a story where a donor who started by giving $5 to a charity then made a series of 22 more annual donations of $25 before finally bequeathing $90,000.

Giving in a world of continuous partial attention

Making online fundraising more difficult is the fact organisations operate in an environment where potential donors are affected by "continuous partial attention" (CPA) - a term coined by Pew Internet and Society advisor, Linda Stone.

Stone defines CPA as the desire to become:
"a live node on the network … to effectively scan for opportunity and optimize for the best opportunities, activities, and contacts, in any given moment. To be busy, to be connected … to be recognized, and to matter."
To tap into this ‘always-on’ mentality we need to ensure that the ability to connect with your cause and raise funds is made as easy as possible - in fact, made a part of everyday life.

Lucy Bernolz, who blogs at Philanthropy 2173, refers to this integration of charitable donations into everyday activity as ‘embedded giving’ or

"the increasingly common practice of building a philanthropic gift into another, unrelated, financial transaction."

Lucy suggests this embedding could take the form of anything as basic as using a charity search engine to search the web or adding an extra pound to your shopping bill to donate to their supermarket’s chosen charity.

Three case studies for embedded giving

Given the growing amount of time people spend online there are a number of ways to reach out to potential donors using the web through social networks, search engines and widgets. With this in mind here are some examples of really effective tools that are excellent ways to enable online charitable giving:

Facebook - Causes Application

With 469,883 daily active users on Facebook, the Causes application is one of the most popular on the site. It allows users to create a badge for their Facebook profile to show support for their personal cause. They can use the app to recruit their friends and most importantly raise money for their chosen cause - although it doesn’t yet allow non-US charities. The amount of money donated by each user gets tallied up and revealed via a public "scorecard". Top 5 causes in terms of members are:
Support the Campaign for Breast Cancer Research - 2,530,183 members - $49,198 donated
Stop Global Warming - 1,282,724 members - $15,375 donated
Animal Rights - 975,364 members - $14,627 donated
Save Darfur - 663,805 members - $47,601 donated
Society against child abuse - 620,738 members - $5,189 donated

Network for Good

The charity fundraising website Network for Good allows donations to more than one million US charities. Last year it created the Network of Giving with Yahoo!, which allows people to create a personalised widget for their cause. The widget is sharable through blogs or email signatures and allows people to donate money and find out more about charitable projects. Yahoo! tracks individual donor contributions and matches the highest sum raised by an individual cause. This year it was The Sharing Foundation, a charity helping meet the needs of orphaned and seriously disadvantaged children in Cambodia. It raised $49,537 from 745 donations in three weeks, and hit $99,074 with Yahoo!’s contribution.

Everyclick.com

This UK-based search engine donates half its money to charity. Each time that someone uses Everyclick to search the web, they can benefit a charity of their choice. The company calls this web user giving, or ‘wugging’ which so far, has raised £340,000 more than 170,000 UK charities.

Any charity that has a supporter receives a proportion of the total sum raised equivalent to the proportion of its supporters using the website relative to the supporters of other active charities. The activity of Everyclick website users who do not select a specific charity will benefit all active charities on a pro rata basis.

Embedded giving is vital to tap into networks of potential donors and empower people to build a personal fundraising network on their own terms.

Plus ca change…

With this change in people’s giving habits come new challenges for charities and fundraisers to adapt both their online strategy and organisational capability to deal with individual networks of empowered donors.

The good news for organisations is the immense opportunities attached to these challenges. Not only that, but the organizational mindset required to overcome these challenges should be familiar to everyone working in or with the voluntary and community sector.

Despite rapid changes in technology, donors’ underlying behaviour remains just the same as it always has been - people prepared to give their time and money to support a good cause. The only thing that has really changed is the dynamic between supporter and organisation.

Donors once relied on organisations for information, campaigning materials and event co-ordination; individuals are now able to take a greater control over their personal fundraising actions.

With this in mind, it becomes the organisation’s role to recognise this shift to a donor-centric world and help empower them. Fundraising organisations that are slow to adapt to this model will have a limited part to play in the philanthropy of the future. Those that fail to do anything won’t exist in ten years from now.