Philanthroper: A New Daily Deal Site for Non-Profit Donations

A new daily deal site launched this past month, but this site doesn’t offer a deal for a spa trip or half off dinner at some posh restaurant. New site Philanthroper offers a non-profit story a day, a daily solicitation for a non-profit doing some good, and asks visitors to give just one dollar. Launched by Mark Wilson, reporter for Gizmodo and Esquire, Philanthroper aims to make donating a daily habit for the internet culture. The idea behind Philanthroper is very similar to dynamite daily deal sites like Groupon and Living Social. Each non-profit gets front-page realty on the site, but just for 24 hours. Instead of a daily discount, Philanthroper shares the stories of non-profits, from local to global, and gives visitors the opportunity to donate a dollar. When the 24 hours come to an end, a new non-profit goes up and the previous day’s organization receives their funds within about a week.

Why just a dollar? As the site states:

So you can donate another $1 tomorrow. And another the next day. Use Philanthroper daily, and we guarantee, you'll donate more over time than you would have otherwise plus it won't sting your bank account so badly. Use Philanthroper every day and you'll be on the right track to give more, more easily. If you're compelled to make a larger donation, fantastic. We always link their site. So go for it.

Philanthroper restricts the amount you can donate to just that one dollar and limits visitors from donating more than once a day. The idea here isn’t to solicit a major gift, but to create a culture of daily giving. Donating a single dollar can be a pretty tempting request. Personally, I spend more on a cup of coffee or downloading an app that will make my phone sound like an air raid siren.

The financial cut Philanthroper takes from each donation is the biggest thing setting them apart from other crowdfunding sites like Kickstarter and USA Projects. That’s because the amount Philanthroper retains is zero – you read that right, zero. Philanthroper states right out that they will never take a cut of your donation, although the site’s payment service mPayy will take a whopping 1% of each donation – a penny.

This is how Philanthroper can offer that minimum donation level of $1, whereas other non-profits are often forced to ask for a minimum of around $10 due to the processing rates of current payment services. Support for the site comes from advertising, so as website Arstechnica puts it “…only your eyeballs, and not your charitable gifts, are paying to keep things going.”

How does a non-profit get a daily deal? The site selects only official 501(c)3 organizations, with a special interest in those that bring in less than $1 million per year. The main focus is on those non-profits that are young and growing and could use every single extra dollar. Religious non-profits are not promoted on the site and individuals raising funds will not make the cut. Think you know a non-profit that’s perfect for the site? Philanthroper invites site visitors to suggest tips for non-profits out there worthy of their own daily deal.

Creating a habit of daily giving in our current internet culture is a pretty exciting idea. Philanthroper is taking advantage of the impulsive nature of users of sites like Groupon and Living Social. If the popularity of the site can continue to grow, there is a possibility to make a huge difference for many small non-profits. Visit the main site here and check out what today’s daily cause is that you can throw a dollar towards.

USA Projects: A New Crowdfunding Platform for the Arts

Created in 2005 as a grant-making and arts advocacy group based, United States Artists (USA) acts as an avenue for individual artists to find private funding for themselves and their projects.  Earlier this month, they entered into the foray of crowdfunding platforms with the launch of the USA Projects, a fund-raising engine that is specifically focused on funding individual artists and their projects through grassroots micro-donations.

Part social network, part fund-raising vehicle, the USA Projects site combines many aspects of other popular crowdfunding sites like Kickstarter, RocketHub, and IndieGoGo.  While still in beta testing, the site has already garnered some major attention according to The New York Times:

In testing, the Web site attracted roughly 36,000 unique visitors and raised a total of $210,000, with an average of $120 from each of 1,500 small donors, Ms. DeShaw said.

Not bad at all for a recently launched crowdfunding platform for the arts. Still, there are some major differences between USA projects and the other crowdfunding sites out there. Here’s a look at some of the similarities and differences between USA Projects and its peers:

Similarities

• It’s all or nothing, baby – Like Kickstarter and Rockethub, USA Projects adheres to the “all or nothing policy” wherein projects must meet 100% of their stated fundraising goal, or the funds are returned to their respected donors.  Some people have seen this as a great motivator for their projects, while others claim it is a waste of time. This isn’t true of every platform though, IndieGoGo allows people to keep all funds contributed to their projects, even if the final fund-raising goal has not been met.
• The final countdown – As is common on crowdfunding sites, artists on USA Projects have three months in which to raise the money for their projects.
• Getting friendly – Most of the platforms out there have a social media element to them, and the USA Projects site is no exception. Users on the site can create profiles, follow artists and funders, send messages, leave comments, and view recent activity on the projects they have funded or have an interest in. This creates a more personalized experience as well as a stronger connection to the projects and the artists.
• Incentivizin’ – Crowdfunding sites mirror traditional donor campaigns in that different donation levels come with various perks and rewards.  Since the perks and rewards are determined by the artists, the endless possibilities are limited only by the artists’ capacity to deliver.  Rewards might range from a personal note from the artist to prints or video downloads of the resulting artwork, from private studio visits to the chance to sing back-up on the artist’s CD, etc.

Differences

• At what cost? - In order to meet the bottom line, sites like Kickstarter and RocketHub will charge a percentage of the final funds and for the credit card processing fees. These fees can amount from 5-8% of a project’s total funds raised.  Since United States Artists is a not-for-profit organization, there is no fee attached to the projects.

  [Correction: According to an FAQ on the USA Projects Web site: "81% of every dollar pledged goes directly to the artist’s project, and 19% supports USA’s programs for artists and the site’s administration." So with this information, it appears that the percentage of funds received by US Artists is two or three times the percentage received by other crowdfunding sites. -- Hat tip to Justin Kazmark.]

• Who gets to play in the sandbox? – Now we hit the major difference between USA crowdfunding and the other platforms out there: not just any artist can add a project to the site.  In order to appear on USA Projects, the artist in charge must have received a previous grant or award from a USA Project Partner or recognized organization.  Visit the main website here to view all of the recognized organizations and their award/grant programs.

This requirement for artists to have been granted a USA grant, or equivalent from a partner organization, in the past in order to pilot a project raises some interesting questions about this model of crowdfunding:

• Is the policy too exclusive? Requiring grants or awards in order to even start a project excludes a large number of artists right off the bat. And while there are a considerable number of organizations partnering with USA, they do not cover the full spectrum of creative professionals in the United States.
• Does the grant/award requirement go against the spirit of crowdfunding? One of the exciting aspects of crowdfunding is that virtually anyone can start a project and find the funders to make it happen.  So what happens to all the first timers? The energetic artists with a great idea and the will to make it happen, but lacking the professional background to make it onto the site? It can be argued that much of the success individuals have had on sites like Kickstarter can be attributed to the strength of the idea behind the project, not necessarily their past accomplishments.
• Will having “approved” artists act as an incentive for people to donate larger amounts? There is definitely a reassurance when donating to an artist who has had some previous success and support. But most existing crowdfunding platforms already have the reassurance of returned funds and set time limits, so how big of an impact will having pre-approved artists make?  Will USA’s stamp of approval result in more donations or larger donations for these artists?

It will definitely be interesting to see how the USA Projects platform grows over time and if the requirements for projects will stay the same or evolve with that growth.  Additionally, how might this model for crowdfunding the arts affect other existing platforms?

An Easier Way to Text-to-Pay

Recently, Obopay Inc., an online mobile payment company, and Benevity Social Ventures Inc., a company focusing on the social practices and giving habits of corporate America, partnered to create a new text-to-donate platform for non-profits.  This new easy-to-setup, easy-to-manage platform takes away many of the problems that have been associated with text-to-give in the past.

The new platform:

• Is FREE for all registered organizations with active 501(c)3 status
• Takes less than 24 hours to setup
• Pays organizations within 30 days
• E-mails tax receipts to donors immediately

Prior to this texting platform, setting up a text-to-give campaign took months and the providers that were available focused mainly on larger high profile clients (the Obama campaign and the Haitian relief effort are just two examples). Payment often took 60-90 days and there were a multitude of fees and charges associated with the products.

In an earlier post, I discussed the merits and benefits of micro-donation campaigns and ways they can best be implemented. Unfortunately, I did not have many suggestions on available products at that time. Many local non-profits and arts organizations simply did not have the budgets or profile to take on such campaigns.

This new text-to-give platform (which currently has no specific name) allows for easy setup and processing of text-to-give donations. A non-profit organization goes to the Obopay website, registers for a key word and the Benevity Corporation, in partnership with the American Endowment Foundation (AEF), creates the account and sets up the service on behalf of the non-profit. No extra work, no forms, no hassle.

When using this service:

• Tax receipts are provided directly to the donor from Benevity via e-mail
• Donations are received by the non-profit every 30 days
• A 7% processing fee is collected from the donation by Benevity and AEF to process the transactions
• The non-profit only receives 93% of the total donated amount
• 100% of the donation is tax deductable (Benevity & AEF are also non-profits)

Overall, this simplistic process combines Obopay’s easy text-to-pay platform with Benevity’s non-profit database and backend billing system, allowing for an easy-to-setup, easy-to-manage platform. A patron texts the organization's keyword to a short code (usually 5 numbers long) and immediately receives an SMS text in response. Potential donors are then prompted to enter a phone number and pin code to donate or they can use the mobile donation website which, on average, takes less than 90 seconds to complete.

Future expansion of this service will include corporate matching and a customizable database with a recommendation function. Benevity already has all registered US non-profits in their searchable database. Soon, the non-profits themselves will be able to be personalize their profiles, and a recommendation function for donors will be added.

Donors prefer push button solutions, mobile applications and ease of use. This new text-to-give solution by Benevity and Obopay opens the doors for arts organizations and other non-profits to provide cutting edge solutions to this problem.

Arts organizations across the country should be looking at this as a huge opportunity to expand micro-donation campaigns and reach new audiences. Patrons are most likely to give directly after or during an experience involving a non-profit. This quick and easy solution for instant giving provides a way for people to support organizations they care about while the experience is still fresh in their minds. Both companies recommend event based marketing for text-to-give donation campaigns.

Arts organizations should advertise how to donate via SMS text during intermissions, around galleries or surrounding specific events. It is a quick way for people to show their support and generally has little effect on their other giving habits. More importantly, the platform can provide a  new revenue stream that opens up giving to a wider range of people and secures multiple gifts from long time donors.

Raising More Money for the Good Work We Do

This afternoon, I had the pleasure of working with Jerry Yoshitomi on a conference session dedicated to grassroots fundraising for the attendees of The Association of American Cultures (TAAC) conference in Chicago. Below are the slides for each of our presentations. Jerry's presentation on grassroots fundraising:

Grassroots Fundraising

Download presentation here.

My presentation on online tools and practices for grassroots fundraising:

Online Tools and Practices for Grassroots Fundraising

Download presentation and notes here.

Micro-donations: Proving Size Doesn’t Always Matter

The Obama campaign, the Nelson Mandela Foundation, and The American Red Cross have all embraced electronic micro-donation campaigns as an effective tool in gathering financial and community support for their causes. The prominence of these cases and their rampant success provides the evidence necessary for arts organizations to begin adopting this new technology to enhance their current giving campaigns. These organizations altered the traditional view of contributed income by looking at three hundred $10 donations as equal to and in many ways greater than one $3,000 donation. This logic has very little to do with the amount of money being given and much more to do with the amount of people giving it. Micro-donation campaigns are about involving as many people as possible and using their collective support to raise awareness as well as funds. They are not just about filling the coffers. They are about educating donors, building support, and cultivating future participation and giving.

A micro donation can be defined as a small gift usually given through electronic media and most often associated with the support of a cause, project, or individual. Point-and-click web based interfaces, e-mail, and SMS txt messaging are the most popular and effective platforms.

Reasons to start a micro-donation giving campaign:

• Small time commitment from management
• Little implementation cost leading to a large return on investment
• Widening donor market segments
• Generating new donors and interest
• Creating ‘buzz’ and word-of-mouth support
• Ease of social media integration
• Building momentum, education, and visibility of the organization

Having acknowledged these benefits, micro-donation campaigns have not been proven effective for annual giving platforms, large gifts or operating funds. They have been proven effective in supporting specific projects, programs, campaigns, and Individuals.

A recent article written by Rich Mintz, the man behind both the Obama Campaign and the Haiti relief effort by the American Red Cross provided 5 big tips to help organizations set up a successful micro-donation campaigns and/or internet giving program.

1. Make it easy to give money and sign up online
2. Reward people who have just signed up with useful follow up contact and content
3. Communicate how much donations matter (even the very small ones)
4. Create online participation opportunities
5. Give people a sense of what’s going on backstage – and in your back offices.

To elaborate:

• Micro donations should be the easiest way a person can give money to an organization. It should take less than three clicks on a website or the simple task of responding to an SMS txt message or e-mail.
• Donors want to know more about an organization once the feel they have invested in it. Send an initial personalized e-mail or SMS text message to donors within 24 hours elaborating on what they are supporting and how they helped.
• Every donor even one who only gives $5 should feel like they have made a difference and created impact. By framing their support this way, the organization is setting itself up for future involvement and donations.
• Creating an online community and an interactive online space provides an outlet for people to be involved with the organization outside of the physical space.
• A behind the scenes look at an organization shows transparency and provides a sense of community. It puts faces, personalities and people with the names, this is important when building support,

Technology has provided a new and proven opportunity for cultivating contributed income in the current economy. If adopted, these campaigns will soon be key in cultivating new donors, creating new support and sheering up funding for new and innovative projects in the cultural community.