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Charities Evolve with Technology

By MARILYN SOLTIS
Floods, fires, shootings, medical bills—devastating circumstances that pull at the heartstrings of people who want to help. For better or worse, crowdfunding sites for charities and non-profits are a quick fix for the altruistically motivated.
 
When school bookkeeper Antoinette Tuff talked down the Georgia school shooter in August, she was hailed as a hero by the president and in an interview on CNN. She ran a small personal charity that took inner city kids on trips “to see the world through a new set of eyes.” CNN disclosed the GoFundMe.com site with Tuff’s goal of raising $1500.
   
In the next two months about 2300 people would donate, sometimes as little as $5 to her cause. Tuff’s modest goal of $1500 had mushroomed to over $111,000.  A separate Indiegogo.com site was set up by some folks who just wanted to say thanks and send Tuff on a vacation to relieve some stress. Their goal of $500 was surpassed and $1445 donated. Of course, Tuff was well publicized and people were moved by her courage, but many causes and individuals are now getting the help they need through these sites.
   
The Annoyance Theater, a comedy venue in Chicago, just surpassed their $50,000 funding request on Kickstarter.com, a site that raises money for creative projects, to build a new center for classes and performances. Kickstarter funds all things creative—films, novels, games, music, art, technology—whatever you are inspired to create. The site claims that 5.2 million people have pledged $876 million for 51,000 creative projects.
   
Anyone can submit an idea as long as it meets Kickstarter guidelines. Projects must have funding goals and deadlines. Here’s the caveat: The project must meet the funding goal or the project receives nothing. The site explains, “All-or-nothing funding might seem scary, but it’s amazingly effective in creating momentum and rallying people around an idea.” To date, over 44,000 projects have been funded.
   
Medical bills seem to be the focus of the majority of fundraisers. GiveForward.com claims to be the number one platform for medical fundraisers and claims to have raised over $68 million for medical bills and other causes. They even provide fundraising coaches who provide fundraising ideas and guidance on how to raise money online. Their best tip? Tell a compelling story including specific details and present a strong case why your loved one needs support.
   
Most of the crowdfunding sites charge anywhere from 5% to 10% in fees along with the PayPal or WePay payment processing fees that are about 2.9% plus $.30. But one of the big sites, You-Caring.com, is supported exclusively by donations and only charges fundraisers the payment processing fee. Since its inception in Octtober of 2011, the site has raised over $31 million for people needing help with medical expenses, adoptions, funeral expenses, etc.
    
Why do people contribute to these sites? Some do it to support those close to them; some feel like they are part of something significant or “cool”; many feel like they are making a difference, even with small donations. But, even with the best of intentions, good-hearted people can fall victim to scams and frauds, so do some homework before giving.
   
For established charities, social media has increased competition for funding dollars in an ever expanding pool of non-profits. According to the Urban Institute, between 2001 and 2011 the number of non-profits in this country increased by 25 percent. In 2010, they accounted for 5.4 percent of the GDP, 9 percent of the economy’s wages, and 10 percent of jobs in 2009.
If you’re looking to leverage your brick and mortar charity’s fundraising capabilities, experts recommend researching the various crowdfunding sites for ease of use and payment methods. Tell the story with photos and/or video and keep it simple. Make sure your own network of donors, supplies, staff members, and volunteers know about it and put the crowdfunding campaign on the front page of your website, on Facebook and Twitter, and try to get your local media on board with a special interest story.
   
While a lot of money is being donated, accountability for those dollars has been a confusing topic. The big charity watchdog, charitynavigator.com, is attempting to make charities accountable to report more than how much is spent on overhead. New guidelines that will affect ratings in 2016 require fundraising pitches to match program descriptions in tax filings and each charity has to collect feedback from constituents and publish evaluation reports. Basically, do these results have any societal value and offer meaningful change in communities and people’s lives?
   
Surprisingly, much of this sort of information is missing—even some of the charities themselves don’t know how effective they are in their mission.

Published: December 07, 2013
Issue: 2013 Philanthropy Guide