We are excited to add a new post to our blog series by the creator of Jcrowd, a new crowdfunding site, preparing for its launch, that we are happy to welcome to the crowdfunding scene.
Small Scale Donors Are the Backbone of Philanthropy (or are they?)
Tomorrow, Wednesday, May 4, is World Give Day and I’ve been asked to post a blog on the subject, “Small scale donors are the backbone of philanthropy.”
Many have the impression that philanthropy is all about big name donors who give millions and billions. This is particularly true after Warrent Buffett and Bill Gates announced the billionaire challenge asking billionaires to pledge half their wealth to charity. Add to this foundations that give grants to large and small projects and it’s easy to see why big name philanthropists and foundations are important to non-profit organizations.
How then do small scale donors benefit philanthropy? What is their significance? In truth, small scale donors became a significant factor in the philanthropy world since the advent of the Internet and particularly Web 2.0 – interactive Internet. Until then, it was simply more cost effective to apply for grants than to mount a fundraising campaign targeting many small scale donors.
Consider: A billion dollars has been raised through JustGiving, a UK online fundraising platform for charities during the past decade. The average donation is about $75. Clearly, there is power in numbers. Nowadays a non-profit organization can mount a fundraising campaign through crowdfunding sites like JustGiving that entails no cash outlays. These online platforms take a small percentage of the raise. All the standard trappings of an off line fundraising campaign are missing. No hard copy advertising, no mailings, no dinners etc. The word is spread through email (opt in, not spam – we hate spam!) and online social media such as Facebook and Twitter.
So, are small scale donors the backbone of philanthropy? I don’t know if they are but they most definitely are playing a larger role in philanthropy and their numbers are growing because of technology. In a recent blog I reported that online is the fastest growing fundraising channel for nonprofits. In 2010, Convio clients raised $1.3 billion online – an increase of 40% over 2009. According to Blackbaud’s 2010 Online Giving Report, as well, year-over-year growth for online giving in 2010 was 34.5% compared with 2009. Donors aged 25-44 are more than twice as likely to make a donation online than offline. Clearly small scale donors are becoming much more of a factor in the philanthropy space than they ever were.