How much giving do online contests and networks really generate?

Who's giving, who's getting.
Feb. 11 2008 7:33 AM

The Facebook Philanthropos

How much giving do online contests and networks really generate?

See our entireSlate 60 special philanthropy issue.

Illustration by Nina Frenkel. Click image to expand.

Can social networks and virtual communities revolutionize charitable giving? Many nonprofit organizations are counting on these online forces to expand their universe of donors. And a number of foundations are testing the potential by underwriting the launch of "social networking for social good" Web sites, and sponsoring online contests to encourage donations.

It's still early, but hopes that viral philanthropy will rain down dollars are probably overblown. To date, sums raised have been relatively modest, though the trend shows movement in the right direction. According to the latest Chronicle of Philanthropy survey, electronic giving to the nation's largest charities, which has been growing at a rapid clip over the last five years, increased at an average rate of 37 percent in 2006. The portals Network for Good and JustGive.org, which allow donors to contribute to a variety of charities, saw increases in giving of 50 percent  in 2007. And yet Internet giving still constitutes a tiny portion of total dollars raised—typically between 1 percent and 5 percent of an organization's overall contributions. Donating via social-networking sites (such as Facebook Causes, MySpace Impact, or any number of cause-related networks like dosomething.org or youthnoise.com) accounts for an even smaller share. The greater promise of viral philanthropy may lie not in electronic check writing, but in increased involvement; 21st-century technology for philanthropos in its most ancient sense.

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To explore this possibility, the Case Foundation, created by America Online founder Steve Case and his wife, Jean, launched twin "Giving Challenges" with Parade magazine and the Causes application of Facebook. These contests will award a total of $750,000 to the charities that attracted the greatest number of donors through the Giving Challenge sites—not the most money, but the most people. The contests, which closed Jan. 31and Feb. 1, respectively, asked participants to champion nonprofit organizations by e-mailing charity "badges" or embedding them in a Web site or blog. The badges can be readily made on a number of Web sites, from pictures, video, and text. Each badge links directly to a donations page. By sending a badge, you direct friends in your network to learn about the cause, give to it, and then e-mail the badge along or post it on a blog. Badges display the number of donors and dollars they have pulled in; the idea, as in all viral marketing, is that popularity drives spending. In the Case Giving Challenges, the horse race was part of the attraction: Contest leaders were listed and regularly updated on the competition sites.

In America's Giving Challenge, the Parade contest, the eight badges that garnered the most donors will win $50,000 each for their respective charities. Unofficial first place went to the "Stephen H" badge for Idea League, which reeled in 2,865 donations. Idea League promotes research and education related to Dravet syndrome, a severe form of pediatric epilepsy. (Click here to see the other top finishers in America's Giving Challenge.) In the Causes contest, the charity with the most donors will win $50,000. Here, the unofficial winner, with 4,564 donations, was the Love Without Boundaries Foundation, an organization dedicated to helping orphans in China. There are also smaller runner-up awards in both contests, and in Causes, daily prizes for the organization with the most donors in a 24-hour period. (The other Causes finalists are listed here.)

The amounts involved show that Case understands these endeavors are more social experiment than nonprofit sweepstakes. Sure, prizes of $50,000 matter for the winning organizations, as do the overall dollars raised (Idea League brought in $62,000, and Love Without Boundaries $94,000). But the denominations of the donations remain small, and it's not clear that one-off contests will lead to more. Any fund-raising professional knows that most nonprofit organizations secure the bulk of their money from a relatively small number of large contributions, either from wealthy individuals or institutional sources. Those gifts demand personal cultivation, and an online nudge doesn't usually do it. Jean Case wants all of this to change. "Philanthropy shouldn't be defined as a bunch of rich people writing checks," she told the New York Times. "Small amounts of money given by large numbers of individuals can be combined to do great things." Barack Obama's success at raising money online from thousands of small donors is the hoped-for model, though nonprofits recognize that political fund raising is different in some ways.

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