Social Ch@nge

Whether you’re an individual raising $100 for a local cause, or a development office with a staff of 50, micro-donations are the trend for you to watch. Why? Well, it all starts with eBay.

eBay changed the game, didn’t it? All of a sudden, anybody could sell anything online, for any price. As an over-excited economist might say, the barriers between supply and demand were falling away, a perfect marketplace was being established, the tyranny of market imperfections was being abolished!

And you could finally sell those ceramic bunny heads that Aunt Gertrude gave you that have been gathering dust in the attic all these years.

So now, perhaps, the same thing is happening to the world of online donations – specifically micro-donations. In the past few years, a variety of online sites have started to offer anyone the ability to set up a mini-fundraising site of their own.

www.givemeaning.com is one of the best developed sites to date, with a terrific interface and a robust financial infrastructure behind it. Want to donate to a group in Ghana, and be sure your donation will make it into the right hands? Givemeaning.com will likely be able to pull it off. In addition, the site stresses the importance of community building, and offers a range of tools adapted from web 2.0 sites such as Facebook.

If you’re looking for less clutter, www.fundable.com might be the answer. This site focuses strictly on providing anyone with the ability to post a financial target, and for donors to give money towards this goal. If the goal isn’t met, no money changes hands. This site sacrifices support and flexibility for simplicity: transactions can only occur through Paypal, or by cheque for a fee. It’s also lacks the support for non-profit/activist causes: it’s a tool that can be used to raise money for anything, but won’t help someone new to fundraising as well as givemeaning.com does.

But suppose you’re a professional fundraiser, in a large established development office. Why should you care? Here’s two reasons why you in particular should be watching this trend very carefully…and perhaps a little nervously.

First, anyone can set up a site for a cause. This creates a potentially infinite amount of competition for established fundraising departments. For example. as a university alumni, I can now give to my alma mater…or, I can give directly to students or alumni who are engaged in specific causes that I want to support.

Second, anyone can donate any amount. If I’m browsing through givemeaning.com, and come across a project I like, I can contribute $5 with ease. This encourages donors who want to make lots of small donations, instead of one or two big donations – something that traditional fundraisers might not want to see happen. On the other hand, the power of the internet often lies in leveraging the tiny movements of a very big crowd: a million $5 donations add up pretty quickly. (In fact, the founder of givemeaning.com has a blog called The $5 Philanthropist, based on just this idea).

In a world of the long tail, with the market subdividing into a million niches, a large fundraising department has to learn to be more flexible, more specific, and more directly in touch with their supporters. Keep watching micro-donation sites carefully: they might just be the future of fundraising.