Online Giving Marketplaces: Changing the Face of Philanthropy
Posted by Neelu Jain, Organizational Strategist on October 13, 2008
Last week I attended the Online Giving Marketplace Conference at Stanford University sponsored by the Stanford Social Innovation Review (SSIR) with Madera Group founder Kath Delaney. The following 5 key takeaways stood out for me:
1. Optimize operations and resource allocation: Kiva President Premal Shah is focusing on “mind blowing efficiency” in his organization. Meanwhile, William Meehan, a senior director at McKinsey & Company, pointed out that nonprofits spend 20-30% of funds to raise money, while in the commercial markets, this figure is less than 1%.
While for-profit and nonprofit organizations have differing operating goals and milestones and measure success by differing values, social profit organizations can continually refine and optimize resources for impact. The most innovative social impact organizations hold this tightly in their operating philosophy.
2. Measure social impact, not moral value: Most panelists throughout the day emphasized producing measurable results, including program officers, social investors and executive directors. Interestingly, William Meehan suggested leaving the philosophical questions for another time and focusing on inputs and outputs for measurement. Ironically, most of us who give to charitable organizations do not ask for these figures or measurements.
3. Develop the appropriate strategy for your own organizational culture:
While highly innovative, the market for online giving marketplace is still in its infancy—well under $500 million in annual giving (from a survey of the largest online giving marketplaces including Network for Good, MissionFish, Kiva, and DonorsChoose). As a comparison figure, all foundation giving in 2007 was approximately $43 billion (Foundation Center).
4. Create picture and profile functionality: When building a giving marketplace, user profiles from a donor and beneficiary standpoint are very helpful and can cause significant bumps in online donor activity—as simple as the ability to upload photos and have donors write a few lines about their participation. People clearly respond to pictures, connectivity and interactivity. The success of profile functionality in donor response is another example of the narrative storytelling approach Madera Group emphasizes in our online communications and fundraising work with our clients.
5. Focus on trust and build transparency in the process:
Similar to more traditional fundraising, in online giving marketplaces building trust and creating transparency in the process is fundamental. Echoed by multiple panelists, one cannot emphasize the importance of supporting donor relationships with radical transparency about how their donations are put to use in supporting an organization’s mission and growth.
Neelu Jain
is an Organizational Strategist with Madera Group. She brings expertise in social capital design, operations, and investment strategies for nonprofit and for-profit clients. She received her MBA from UCLA Anderson School.
