The internet, social media and mobile technology are changing the way we give, why we give and who we give to. But is the charity sector keeping pace with these changes?
Residents of the United States, please read this important information before proceeding
Please read this important information before proceeding.
In the strange, difficult world before the arrival of the Internet and smartphones, we gave to charities by putting money in a bucket, a cheque in the post or setting up a direct debit from our bank account. We certainly didn’t tell all our friends the moment we made a donation, if at all. But new technologies and platforms are opening up the process of philanthropy and empowering donors as much as they have charities. We have the ability to reach out to our social networks through Facebook, Twitter and Instagram. We can champion a cause like never before—giving now has the potential to go global and viral.
Increasingly social media enables people to share and discover fundraising stories, while the proliferation of smartphone technology enables us to react and donate in the moment. This has dramatically accelerated the speed with which people can share and donate to a cause.
While online giving represents a substantial new revenue source for charities, it is only a small slice of charities’ overall income. According to a survey by Barclays Digital Giving in March this year, offline payments still account for 80 per cent of charitable donations. The charity sector still largely deals in cold, non-digital cash with 95 per cent of charities still accepting donations via cheque and 87 per cent by cash.
Online giving is gaining momentum - the vast majority of UK charities (78 per cent) think that the number of online donations will increase over the next three years; the average online donation has increased by 13 per cent year-on-year—so people are becoming more generous online, too. There are benefits for both donors and charities connecting online. Marcelle Speller, Founder of Localgiving.com, says: ‘The great thing about online giving is that it is quick and easy not just for the donor, but also the charity. And, sites like Localgiving claim Gift Aid automatically, which increases the value of the donation by 25 per cent for UK taxpayers, with no extra cost to the donor or admin for the charity’.
Social media has the potential to become a major driver of giving. More than 24 million people in the UK check Facebook every single day. While you can’t give directly through social media, it socialises the giving process and holds the content—the moving messages, videos, images and stories—that prompt action, rally support and compel people to donate. Today, some 40 per cent of the visits to JustGiving come through Facebook and, collectively, these referrals to the site account for £63 million of donations to charity.
Unlike traditional, more discreet acts of charity, online giving has a social dimension—people actually share the fact that they have donated to a cause among their social network and ask others to donate, too. In fact, social media empowers a donor to become a hybrid ‘donor-fund-raiser’—with the click of a button, they can motivate friends in the way an impersonal appeal never can. The most extraordinary UK example of an online donor-led, peer-to-peer giving campaign was last year’s #Nomakeupselfie, which raised £8 million within a week for Cancer Research UK. Social media has created a truly organic and viral form of philanthropy.
#Nomakeupselfie began with people posting images of themselves without make-up on social networks. It wasn’t started by Cancer Research, but their social media team responded rapidly and asked people to donate via text. Cancer Research were skillful in maintaining the momentum of the campaign by communicating via Twitter and Facebook with donors, responding personally to those posting photos and providing updates. As a final thank you, they announced that the money would be spent on 10 important clinical trials that they previously couldn’t fund.
According to the Cancer Research UK’s social media team: ‘Within a day, the UK public had raised over a million pounds for our research. Two days in, we’d hit the £2m mark. At this point, there were a lot of shocked faces in the Cancer Research UK office. It was a genuine snowball effect and it started to go global, with people around the world contacting us directly to ask how they could donate from abroad’.
Crowdfunding also provides new platforms for giving. Charities have long relied on crowdfunding—even if we didn’t call it that—encouraging their supporters to fundraise through sponsorship for running a marathon or climbing a mountain. The difference is that specialist crowdfunding platforms—like JustGiving Crowdfunding—empower individuals to raise money for causes they care most about rather than on behalf of an established charity. They allow vetted people to raise money for philanthropic causes that might not be significant or persistent enough problems to warrant registered charity status. For example, a donor taking a lead and raising money to buy defibrillators for a primary school or raising funds to buy supplies for migrants in Calais. These are no less worthy causes than the traditional charity causes.
Interestingly, crowdfunding is proving to be particularly attractive giving medium for Generation Y (those born between 1980 to the early 2000s). This demographic give less to charity than any other age group, but they spend more time online than any other age group. Nevertheless, Fundly—one of the most successful charity crowdfunding platforms—has raised more than $330 million since 2009 from young people’s contributions. The key to unlocking the philanthropists of the future has to be engaging online giving solutions like this.
The smartphone is opening up new giving opportunities. We are a nation of phone addicts whether it is texting, emailing, web browsing, reading, shopping, taking photos or checking into Facebook. And we are becoming more accustomed to buying and paying for things on our mobiles, including making donations to charity by text or an online card payment. There are 49 million mobile users in the UK, all, therefore, potential donors. A mobile phone enables people to donate in the moment as and when they are moved by a cause.
Some interesting apps are being developed that encourage new ways of giving on the go. This September, the supermodel Natalia Vodianova launched Elbi, an app with a mission to reinvent giving for the digital age. Elbi allows people to create content, send messages, vote or donate directly to charities. It brings a new model of two-way interaction between charities and their supporters. People can receive live updates from the charity, donate and more. For example, users can draw a picture to cheer up a sick child in a hospital or create content for classrooms in small, remote villages.
Another innovative app, SnapDonate, allows people to give on impulse by pointing their phone at a charity’s logo—on a poster, flyer, TV or anywhere. Through image-recognition technology, the app detects which charity it represents and a person can give as much as they like instantly via JustGiving. It allows people to make a one-off donation to a cause that moves them even when they have no cash to hand.
SMS/text giving is also becoming an increasingly popular way to donate to charity. Richard Craig, CEO of The Technology Trust and the founder of Catalyst for Good Causes, believes that ‘the most exciting development in online giving in the last five years is the mobile possibilities—the frictionless nature of sending a text donation by SMS and the ability to enter your phone number online, have an SMS received to validate the donation and have it taken from your bill’.
Whether it’s at home watching TV, commuting to work or at a music festival, an SMS donation is quick, immediate and simple. It is not surprising that we see lots of charity adverts on the London underground with SMS as the response method. They work extremely well. Around 90 per cent of the donations made to the #Icebucket Campaign and #Nomakeupselfie were made by text message.
JustTextGiving, created by Vodafone and JustGiving, enables anyone in the UK to donate by text. It’s free, easy to set up and every penny goes to charity. Charities can create a unique code to promote a campaign or cause. People simply text the specific charity code and the amount they want to donate to 70070.
The opportunity of free SMS fundraising can make a huge difference to small charities. Through JustTextGiving, Acorn Children’s Hospice raised £7,500 from 2,000 fans at an Aston Villa football match when ex-footballer Paul McGrath asked the crowd to get their mobiles and donate.
Zoe Amar, a digital communications expert, says she is ‘not convinced that the majority of charities have yet taken up this opportunity: 63 per cent of charities do not have mobile-friendly websites and a third of charities don’t have the facilities for text donations. This needs to change as an increasing amount of donors will expect to donate via mobile’.
There is also an overwhelming choice of more than 600 giving platforms designed for people to make donations or fundraise on behalf of a charity. The first was JustGiving in 2001. According to its co-founder, Zarine Khara: ‘Enabling people to collect charity donations securely online seems blindingly obvious now, but JustGiving only stumbled upon it after several iterations of its service. It is now the fastest-growing social platform for giving in the world, with almost 15 million registered users and over $3.5 billion raised for good causes’.
Some of these platforms are charities themselves, some for-profit businesses. Some charge the charity a set-up fee, subscription or take commission on a donation and some are completely free. Some are beautifully designed, flexible and make it a pleasure to donate, while others are clunky and provide poor service. In essence, a charity gets what it pays for.
Judging by their popularity, the giving rates, site traffic and social media following, the five best platforms are: BTMydonate, Global Giving UK, JustGiving, Localgiving and Virgin Money Giving. These five platforms offer a great user service to charities and donors alike, making giving easy, efficient and enjoyable.
All five platforms offer individuals the opportunity to fundraise through a sponsorship page. All of them offer automatic Gift Aid reclaim, which adds an extra 25 per cent to the donation with no added cost to the charity or donor. It also relieves charities of the administrative hassle of reclaiming from HMRC. With the exception of BTMydonate—which is completely free—the other four platforms all charge charities in varied forms. JustGiving, Localgiving and Virgin Money Giving have the advantage of having mobile-optimised sites.
As the names suggest, Global Giving UK and Localgiving have a specialist focus and are experts in their slice of the charity sector. Global Giving UK supports grass-roots charities in the developing world. Localgiving connects donors to local charities and community groups. About 30 per cent of the groups and organisations supported have a turnover of less than £5,000 per year, so they are too small to be registered as charities and are therefore excluded from other online platforms.
At a time when charities are grappling with government funding cuts, and with the recent high profile scandal of Kids Company, the importance of conducting due diligence before donating cannot be overstated. Most donors don’t have the time to conduct the extensive research necessary. Online giving can provide a due diligence service that traditional forms of giving cannot. Both Localgiving and Global Giving UK carry out a thorough vetting and eligibility process before an organisation can register on their sites. For example, Localgiving checks a charity’s governance, finances and operations. The platform carries out further checks for smaller organisations that are not registered charities, including a yearly reappraisal.
Giving online can also become a seamless part of our lifestyles without having to actively give, whether it’s through shopping online, booking a holiday or selling on eBay. Give as you Live is a shopping and price comparison website which you install on your browser. It works with more than 3,600 leading online retailers, including Amazon, eBay, John Lewis, Apple and Expedia. Not only do you get the best price when you shop, but, without spending any extra money, you are giving to charity. Like other price comparison websites, Give as you Live is paid commission from the retailer each time a sale is generated for them through the site and it passes at least 50 per cent of this on to your chosen charity.
When selling goods on eBay, there is an opportunity to give a percentage of the sale proceeds to your chosen charity through the PayPal Giving Fund—the charitable collaboration between eBay and PayPal—and it passes the full donation plus Gift Aid to the charity of your choice.
The trend for online giving is not going away and the opportunity and options for donors to engage with charities online are growing. Online offers donors speed, simplicity, spontaneity, efficiency and choice in their charitable giving. It has turned giving from a private affair to one that is social and about sharing as well as caring. And it is in this sharing that a donor has the power to raise much more for the cause.
The biggest obstacle is not the lack of innovative giving technology but resistance from charities. According to the Barclays Digital Giving survey, one in five charities does not have the facilities to accept online donations. The focus now should be on encouraging as many charities as possible to use the online tools that are available to them to engage supporters and donors.
[image 1] The Future of Charitable Donations Report 2015
[image 2] Photo: Cancer Research UK’s Dr Kat Arney #nomakeupselfie
[image 3] Photo: Elbi.com
[image 4 - left] Source: Jonathan Moore/equimedia Group
[image 4 - right] Source: The Future of Charitable Donations Report 2015