Collaborative Fund Raising with Give Buttons
Mark Chignell
Vocalage Inc.
July 2011
Executive Summary
Vocalage has developed a method of collaborative purchasing (www.givebuttons.com) where a "Give Button" can be associated with any product, allowing that product to be bought by a group of people. Our market research suggests that philanthropic fund raising amongst groups may be a particularly important application of collaborative purchasing. Universities and colleges are attractive targets for this technology because they have natural groupings of people (i.e., people who graduated from a particular department or program in a particular year). Classes often give group gifts such as classrooms or scholarships, but better tools are needed for coordinating, motivating and implementing group gifts. Our approach is to market fund-raising targets as products that can be purchased by a group. We believe that this will lead to giving by people who are currently excluded from giving activities, because they cannot associate their giving with a particular benefit or outcome, or because the act of giving with current methods is typically an individual, rather than social, experience, and thus less rewarding.
Using our technology, fundraising goals are packaged as giving opportunities (targets) in a catalogue where various opportunities in the catalogue can have Give Buttons associated with them. We are currently looking for innovative organizations who would like to have us work with them to increase their level of fundraising, strengthen the connection of their alumni and friends to their peers and to the institution, and to increase the transparency of gift giving outcomes, using our technology.
How it Works
Depending on your needs and preferences, we can either host a collaborative fundraising site for you (e.g., www.givetargets.com/YourOrganizationNameHere) and/or we can work with you to add Give Buttons to your site, which allows people to give to a specific objective (e.g., a scholarship or a building) collaboratively. If you chose to host fundraising targets with us we would build an online catalogue for you where each gift giving target could be bought by an individual, or collaboratively. If you chose to have us add collaborative gift giving to your site, we could place Give Buttons on any page where there is a specific fundraising target (such as a scholarship) with a well-defined cost attached to it. To place the Give Button on one of your pages you would simply add some Javascript, that we provide, to your page so that the button would appear on the browser when a person visited the page. If the person then clicked on the Give Button it would then send him or her to a composite page that we create (using an i-frame) that would appear to be still on your site, but where we would execute the collaborative giving functionality.
After the user selects the collaborative payment function on an entity page (whether in a givetargets catalogue that Vocalage hosts, or on the Institutions Website), a dialog appears which allows the user to choose how the collaborative payment is to be made. At this point the user may choose a personal contribution that he or she wants to make and may also invite others to contribute to the entity. Invitations to others to make collaborative payments to the costs of an entity may be made by emailing friends, choosing contacts in a social network, or selecting some other kind of group or list, depending on the wishes and requirements of the Institution. Once the collaborative payment has been set up, the user may go through a payment dialogue to make the payment, or may defer that step to later, possible going on to look for other fundraising targets that he or she wants to contribute to.
An Example
Academy University wants to reinvigorate its fundraising processing by using innovative collaborative gift giving. Since it doesn’t want this function to interfere with its proven fundraising methods which has worked well with older donors, it asks Vocalage to develop a hosted give targets website aimed at alumni of the university who are under 45 years in age.
Academy University identifes a number of fundraising targets, each with a an associated cost/price, attractive image, and text description. Vocalage builds a social giving catalogue with giving targets (“products”) based on the information provided by Academy University. Each giving target in the catalogue has a Give Button next to it, allowing people to raise funds for the target collaboratively.
Each institution will have its own way of organizing and prioritizing fundraising targets, but in the case of Academy University the following types of fundraising target are used (note that this is just an example and the method will work for any fundraising task that has a specific outcome and costs):
- Sports
- Scholarships (undergrad, grad, department)
- Chairs, professorship
- Labs
- Colleges
- Renovations
- Study carrels
- Electronic classrooms
- Courseware
- Software
- Seminars
- International exchanges
- Teaching award
- Start-up research funding
- Sports facilities
- Clubs
- Medical research
The Give Targets can be organized into various sections depending on the Institutions’ needs. For instance, Academy University might choose to organize its site in terms of; Teaching, research, students, sports, and infrastructure.
Making it Work
Once social giving for an institution is set up, whether on the institution website or on a hosted Give Targets site, available alumni and other prospects may be directed to it by the Institution. The institution controls the branding and promotion of the social giving functionality. Vocalage handles the collaborative payment functionality. It collects PayPal, Visa, Mastercard, and American Express payments, aggregates those payments, and passes them on to the Institution.
What it Costs
The US Better Business Bureau, in its standards for charities (http://www.bbb.org/us/Charity-Standards/) mandates that organizations spend no more than 35% of related contributions on fund raising. A study by the Council for Advancement and Support and Education Study concluded from a study of 51 Colleges and Universities that the reported mean cost of fundraising was 15 cents on the dollar, with a median of 11 cents (CASE, 1990).
It seems likely that a median of 15 cents on the dollar attributable to costs of fundraising is an underestimate, with much of the costs of fundraising by some organizations being outsourced, so that only dollars received are accounted for by the organization. Research cited by Hager et al (2002), based on 1998 returns of the US Form 9902 found that 59 per cent of nonprofits receiving direct public contributions did not report any fundraising expenses, including nearly a quarter of those receiving more than $5m in contributions.
Our goal is to work with institutions to ensure that the cost of raising funds through our method of social giving is less than 10 cents on the dollar. We work with institutions to negotiate the deal that works for them, where our costs are defined as a combination of setup fees, subscriptions and transaction fees that best suit the needs of the institution, while ensuring that over 90 cents of every fundraising dollar goes to the institution.
References
Council for Advancement and Support of Education (1990). Expenditures in Fund Raising. Downloaded from http://www.case.org/Documents/Research/LillyReportExpendituresFRAROtherConstituentPR.pdf on July 10, 2011.
Hager, M., Rooney, P., and Pollak, T. (2002). How fundraising is carried out in US nonprofit organisations. International Journal of Nonprofit and Voluntary Sector Marketing, 7(4), 311-324.
