Once we donated over the phone or by dropping some change in a Salvo’s tin, but today technology means tangible donations have gone online. So what does this mean for traditional charities? asks Jessica Morris.
Within hours of Alton Sterling’s death at the hands of police officers at Baton Rouge, a GoFundMe page was set up for his family. It was shared 87,000 times across the globe and aimed to raise the generous sum of $200,000.
Compelled by the outrageous injustice I had seen on TV, I was one of the thousands who clicked the donate button, inserted my credit card details and selected ‘submit’.
Within five minutes I had donated to a family I’ll likely never meet—and I wasn’t the only one. In total, nearly 24,000 individuals donated more than $700,000 to the Sterling family. That’s the power of crowdfunding.
Since 2010, crowdfunding has taken over the internet. Numerous platforms across the web allow people to donate to a cause of their choice, raking in an estimated $24.4 billion in the US alone.
The benefits of the crowdfunding movement have been astronomical, not just for the Sterling family, but for causes across the world. After the ALS Ice Bucket Challenge went viral in 2014, people literally poured ice over their head for research into motor neuron disease and raised $3 million in Australia and $220 million around the world.
These donations have led to the identification of a new gene related to the disease, a feat not possible, or years away, if not for the power of crowdfunding.
But the negative ripple effect of this new fad has also been felt. Fraud is prevalent and scams are easy to fall for. In 2015, Portland local Erik Chevalier was the first to experience the legal consequences of this, when his failed Kickstarter ‘Doom’ board game campaign used more than $122,000 raised for personal expenses. Chevalier was fined $111,793.71 for his scam, which was suspended due to his inability to pay the sum.
The repercussions have also been felt by established charities, with speculation that the new influx of crowdfunding causes has deprived them of the funds they need to continue their work.
Since the NAB started reporting on the charitable giving sector in 2012, results have shown longstanding charities have been in crisis mode. While the charity sector grew by more than 10% in 2014, their income strain has been unpredictable, and it dropped to just above 2% in 2015, prompting talk of mergers and ongoing reform to decrease red tape for charities.
So why is this happening?
Arguably, this may be due to what’s called ‘donor fatigue’. The reasons this occurs may vary, but the NAB Charitable Giving Index report lists economic downturn, lack of employment opportunities and even stress and anxiety as factors.
On top of this, due to the issues of privacy or, moreover, breaches of privacy, people are more cautious than ever when giving to charities, and knowing just how much money is going to a specific cause area or project.
Leigh Cleave, fundraising and communications director of The Salvation Army, says that major donors see their donation as an investment and part of a long-term relationship. ‘Donors are more interested in charities delivering impact for their investment,’ she says.
But while the crowdfunding industry has doubled every year (in 2014, 3.3 million people pledged more than $500 million on Kickstarter to various causes, projects and entrepreneurs), it’s obvious that Australians haven’t suddenly become more selfish, but, rather, more discerning.
The future is here, but there’s no clear evidence that this spells the end of traditional fundraising methods. At least not yet.
In an interview with The Daily Dot, GoFundMe spokesperson Bobby Whithorne emphasised the augmentation of community support that has been created through these platforms.
‘GoFundMe is not a replacement for community support, but just another way of expressing it,’ she said.
Like many businesses and organisations, the fast-paced changes in technology and social media have also prompted charities to think outside the box.
The Salvation Army and Myer have utilised the community support structure for years, raising millions of dollars for the less fortunate. Their most recent endeavour is the Give Registry, which is an item-for-item strategy, whereby Myer matches the donation of each customer to support and supply Salvation Army women’s refuges.
The Salvation Army’s secretary for women’s ministries, Colonel Karyn Rigley, explained how valuable this style of fundraising is to the charity.
‘Family violence is also the leading cause of homelessness for women and children and often when a woman leaves a violent situation she leaves with nothing but the clothes on her back,’ she said. ‘Through the Give Registry we’ll be able to provide further practical care to women in crisis.’
Alternatively, charities are also encouraging donors to create their own fundraising pages on line, such as the Salvos’ Be a Souperhero challenge, which applies the concept of crowdfunding in a more streamlined way to raise funds for homelessness prevention.
By simply downloading a toolbar extension at www.folo.world, these initiatives allow customers to donate to their chosen charity (one of which is The Salvation Army) when they shop at the more than 100 online retailers which pass on a percentage of the sale price to that charity.
‘The really incredible thing about Folo is that [donations] accrue over a year,’ Folo spokesperson Jaimee Abict tells Warcry. ‘So 500 users shopping online for a charity would generate $30,000-$60,000 a year. We’re talking revolutionising the charity sector and the way charities are funded.’
In a statement to SBS, Tim Costello, CEO of World Vision and chief executive of the Community Council for Australia, Australia’s premier charity body commission, said, ‘There is an argument of scale and there certainly is an argument for merging. There’s enough blindness, poverty, homelessness to go around for all of us as charities.’
As technology changes, so does the charity sector. We can only hope that crowdfunding and other methods of donating are utilised within it, so charities such as the Salvos can continue their life-saving work.