Is Crowdfunding Actually Helping Philanthropy?

February 10, 2014
The Face of Crowdsourcing
The Face of Crowdsourcing

Several weeks ago a friend of mine told me about a friend of hers who was struggling to pay for steep medical bills that resulted from a brutal case of domestic violence.  She was rallying support for Jacey Gengenbach, set up a Facebook page and started getting the word out to people that they could read Jacey’s story and donate money through Red Basket , a crowdfunding non-profit that helps donors connect with causes and tracks progress to that specific goal.  To date, Karyn’s efforts have raised $14,450 for Jacey with $4300 left to go.  My family made a small donation and shared the link within our respective networks to help drive traffic to Jacey’s facebook page.

This week the New York Times ran an article on the efficacy of Crowdfunding sites.  The question was, did legacy non-profits like The United Way lose donors to these types of sites where people could direct their donations to a more specific cause or individual.  Crowdfunding is still a very small percentage of overall monies raised for philanthropies but it is growing quickly and legacy institutions total annual donation totals have stagnated.  The article mentions not surprising points that impulse-giving is more likely to occur when people see eye-catching photos or emotionally appealing video content, though not as much interest is paid to the results of these donations and the impact they have, whereas established, traditional non-profits typically have reporting and accountability mechanisms in place.

I find this dynamic interesting and believe that traditional philanthropic institutions have an opportunity to incorporate some of the components of crowdsourcing into their models.  The on-line crowdsourcing and social media component may also help remind the larger institutions that giving stems from an emotional response and if all politics is local, giving is about people, not concepts.  Once we contributed to Jacey’s cause, the follow up was tremendous.  We tracked her progress to the goal daily, learned more about her experience and felt like part of a larger community dedicated to a righteous cause.  That cause had a face and a story.  The ability to donate on my phone and in under a minute (including account sign up) was also key.  And it felt good.  I can also say that it created a heightened sense of the importance of giving and the opportunity to teach that to our kids.  In that respect I think that in the world of philanthropy, a rising tide lifts all ships.