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.

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.

Case concedes that the shift she hopes for will take time. She believes that "leveling the playing field" in philanthropy has as much to do with "citizen engagement" as it does expanding the "donor pool." Research in the field also consistently shows a high correlation among three kinds of giving—"time, talent, and treasure," as they're known. Stimulate a lot more of the first and second, and in time you may get more of the third.

And so the Case contests strive to move people beyond "bumper sticker" support for a cause, as Steve Case explained to CNN. The competitions are deliberately called "challenges"—calls to action. And they employ the term giving in its broadest sense—financial donations, along with volunteer work or simply championing a cause within one's social network. In response to the skeptical question about whether a badge is a bumper sticker received over e-mail, Case maintains that by providing detailed information about an issue, demonstrating that others are onboard, and then offering easy one-click giving, this kind of advocacy allows individuals to activate their social networks in a more hands-on, participatory way.

Viewed in this light, the two Giving Challenges fit right into the Cases' professional and philanthropic history. Alongside her husband, Jean Case held senior executive positions at AOL, helping to build the service—and the network it created. In launching their foundation, the couple hoped to search for solutions to social problems at the "platform level." In the 10 years since, that has mostly translated into community development, often with technology as the central vehicle. The Case Foundation funded a number of the earliest "digital divide" initiatives in the United States, including PowerUp, a network of 1,000 community technology centers for underserved youth. They have sponsored similar efforts internationally, among them a partnership with King Abdulla II to create universal information technology access across Jordan. The precursor to the Giving Challenges, Case's Make It Your Own Awards,called for ideas about how to improve a local community. Last summer, the top 100 entries were reviewed; in February, the final four will be chosen by Internet votes, and receive $35,000 a piece.

Both challenges have been laboratories of giving behavior. Beyond the basic statistics—number of participants, amount of donations, demographics, giving preferences in terms of geography and type of cause—we would love to know whether these social networks brought first-time givers into the fold. The Case Foundation has pledged to share its findings. In the meantime, more notable than the amounts donated is the breadth of causes and organizations championed—many very small and local—from all across the country, if not the globe. The ardor is also palpable, or as close to palpable as video streaming will allow. Some participants have posted clips to YouTube. In one, "Heather Goes Bonkers," a woman dances and screams, wild with excitement, as her organization wins Causes' $1,000 award for daily leader. In this sense, at least, it's a brave new philanthropic world.

Georgia Levenson Keohane is a writer and consultant in the fields of social policy and philanthropy who often works with nonprofit organizations. She lives in New York City.