How to Use the Internet for Group Fundraising

In the last four years, the number of websites that help individuals design and implement their own group fundraising campaigns has exploded. Networks of friends, family, and activists can now raise money effecitvely and collectively for any number of causes. But with all the options available, sometimes it is difficult to know which platform to choose and how best to put it to use.

This guide features:

• 5 questions to ask yourself before starting a fundraising campaign, and
• 3 factors to consider when choosing a group fundraising platform

A New Model for Fundraising

The phenomenon goes by several names: viral fundraising, team fundraising, grassroots fundraising, group fundraising, and even network-centric fundraising. In each case, the concept is the same. An individual or group creates a page on a website and sets a fundraising goal on behalf of a non-profit organization or project.

The initiator then emails friends and family requesting financial support for the cause. On occasion, friends and family are so enthusiastic that they forward the announcement to their individual networks. Sometimes news of the project reaches the "blogosphere" or catches the attention of a journalist.

Suddenly thousands of people are responding and the fundraising goal is met in record time. Well, that’s the best case scenario. More often than not, close friends, family, and a few anonymous philanthropists come through with the cash needed to meet the fundraising goal. Group fundraising success stories can be found on most websites that provide the service.

Here are links to a few collections: FirstGiving Storybook, GiveMeaning Successes (click on the “Successes” tab), Fundable: Recently Completed Group Actions.

Reflecting the diverse interests of donors, viral fundraising delivers cash to initiatives as distinct as one-person independent projects and full blown BINGOs (slang for Big International Non-Governmental Organizations). If you have friends, family, and a passion for a specific issue, then you’re ready to start a group fundraising campaign.

Starting a Group Fundraising Campaign

Before initiating a fundraising campaign, there are five important questions you’ll need to answer.

• What issue does your campaign target?
• Where is the money going to go?
• Who can you ask for financial support?
• When do you need to meet the fundraising goal?
• How are you going to convince people to support the campaign?

Unfortunately, most network-centric fundraising websites offer limited support in helping individuals to respond to these questions. They provide the tools with the expectation that visitors will supply the vision.

Selecting a Fundraising Website

Your responses to the "getting started" questions will probably influence your choice of a group fundraising website. Below are three factors you should think about when choosing one of the nine websites mentioned in this guide.

Factor 1: Registered Non-profit versus Informal Project

Most team fundraising websites are very selective in the organizations and projects you can raise money on behalf. They often limit the recipient list to registered non-profit organizations. Firstgiving, JustGive, Network for Good and whatgoesaround.org (WGA), for example, use GuideStar’s registry of 1,500,000 U.S.-based non-profit organizations.

All fundraising campaigns that make use of these four websites must target an organization that is represented in the GuideStar directory. GuideStar is an online service that displays the public records and contact information for all U.S.-based 501(c)3 organizations. JustGiving is the British sister company of FirstGiving (mentioned above).

Their website uses the same technology as FirstGiving, but requires that individual campaigns target non-profit organizations registered in the United Kingdom. GiveMeaning, based in Vancouver, British Columbia, allows individual fundraisers to build a campaign on behalf of any registered U.S. or Canadian non-profit organization. GiveMeaning also offers personal support in formulating a fundraising campaign and selecting an organization.

If you have identified the cause but are looking for a worthy organization, the staff at GiveMeaning will help you identify a list of potential recipients. All of the websites mentioned so far are obliged to deliver funds to registered non-profit organizations. DropCash, Fundable.org, and ChipIn permit users to raise money for any individual, group, company, or non-profit organization.

These sites do not automatically offer a tax receipt on monies collected. As a result, Drop Cash, Fundable.org, and ChipIn are ideal for raising money on behalf of an unincorporated individual do-gooder, a religious or church group that lacks 501(c)3 status, an initiative that does not have non-profit certification, or an informal group of people working on an independent project. ChipIn's check out system, however, allows the campaign founder to customize the "thank you" message.

This feature can be used to insert an organization's EIN number for tax-deduction purposes. The resulting email receipts could serve as proof of a tax-deductable donation.

Factor 2: How much are you willing to pay?

The biggest drawback to online group fundraising is that the amount collected is usually subject to a 3% to 8% commission. Virtually all of the websites mentioned in this guide charge a commission for accessing their tools and for processing online donations. GiveMeaning is an exception in this regard.

The Vancouver-based foundation uses corporate sponsorship (banner advertising) to offset the costs associated with delivering funds to the recipient organizations and projects. As long as you’re willing to accept a banner ad hovering over your personal fundraising page, GiveMeaning offers a platform that ensures the maximum amount of cash reaches its target.

All of GiveMeaning's banner ads are screened to ensure that only ads for socially responsible companies appear on the site. GiveMeaning also honors requests from campaign organizers to have certain ads blocked if there is an ethical conflict between the advertisement and the fundraising campaign.

JustGive and whatgoesaround.org offer the second most affordable platform for delivering funds to a registered non-profit organization or project. Both sites apply a 3% charge on all donations in order to recover charges related to processing credit cards. NetworkforGood comes in third with a service charge of 4.75% (effective November 1, 2006).

Unfortunately, JustGive, whatgoesaround.org, and NetworkforGood do not currently permit users to specify a fundraising goal or to display a barometer of progress made toward reaching that goal.

According to Katya Andresen, Vice President for Marketing, NetworkforGood is planning to launch personal fundraising web widgets in late November 2006, which will allow individuals to track and publish the amount they have raised. DropCash, a freeware online project created by Andre Torez and Jason Kottke, relies entirely on PayPal for credit card processing.

The site passes a fee of roughly 3% from PayPal to the fundraisers. ChipIn offers three forms of payment: via PayPal, directly to a checking account, and by way of a conventional check. Initially, ChipIn campaigns will not be subject to any commission beyond the cost of credit card or PayPal processing.

Olin Lagon, Chief Operating Officer, reports that ChipIn will eventually add an additional commission of 1% to 2% for certain types of group fundraising campaigns while continuing to provide a commission-free version for the remaining campaigns.

FirstGiving and its sister company JustGiving both charge 5% on all funds raised, in addition to the credit card processing fee (fixed at 2.35% and 1.4% respectively). Both entities are for-profit businesses. They offer sophisticated email support for contacting friends and family, and provide advanced tracking of progress made toward the fundraising goal (see special features below).

But along with these tools comes the 5% commission. Despite the commission, many nonprofits are turning to FirstGiving and JustGiving to coordinate their viral fundraising programs. The company reports threefold increases in the amount of money raised through group fundraising compared to traditional offline fundraising.

FirstGiving provides a list of case studies that demonstrate how the 5% commission can quickly pay for itself. Thanks to a U.K. charity program called Gift Aid, all donations made through JustGiving receive a top-up of 28%, which offsets both the commission and the credit card processing fee. A £10 donation becomes £11.93. Fundable also applies a substantial commission on money raised.

Like FirstGiving, JustGiving, and ChipIn, Fundable is a for-profit business. They charge a 7% commission on all donations. This fee includes the credit card processing fees. If commissions are the determining factor in your campaign, then GiveMeaning would make the most sense for U.S.- and Canada-based campaigns. ChipIn or DropCash would provide the platforms of choice for individuals collecting money for non-registered organizations and projects.

In some cases, however, the special features that come with a group fundraising platform can reduce the importance of the commission and processing fees.

Factor 3: Special Features

Every group fundraising campaign is unique. Sometimes the initiator requires sophisticated email support and tracking of all donations made.

Other group fundraising campaigns call for barebones email support but a speedy start-up and check out procedure. The link below details the unique features of each grassroots fundraising website mentioned in this article.

Comparison Chart of all Group Fundraising Platforms

Begin Fundraising Today

You now have all the information you need to create a successful fundraiser and to select the right platform for your campaign. If you have success stories that you want to share, please email them to:

Peter Deitz

Social Actions

Good luck.