Ken Goldstein, MPPA

Ken Goldstein has been working in nonprofits and local government agencies from Santa Cruz, to Sacramento, and back to Silicon Valley, since 1989. He's been staff, volunteer, board member, executive director, and, since 2003, a consultant to local nonprofit organizations. For more on Ken's background, click here. If you are interested in retaining Ken's services, you may contact him at ken at

Monday, December 04, 2006

The future of online fundraising

I received an email from a college student asking if he could interview me about ePhilanthropy and the future of online fundraising.

The questions gave me an opportunity to think creatively about the application of some web 2.0 concepts, such as tagging and feeds, and how they can improve our practices.

His questions and my answers follow. Let me know what you think...

> * How did Internet change the way nonprofits fundraise?

Maybe a better question would be, "HAS the Internet changed the way nonprofits fundraise?" Because for a lot of organizations, it still hasn't.

There are certainly plenty of new tools, but most nonprofits (outside of universities and hospitals) are traditionally very slow to adopt new technologies. This is for a few reasons, including: budget, being "people focused," lack of staff/resources, and budget (did I mention budget?).

Still, for those organizations that are on the ball, technically speaking, it has broadened their tools for appeals. The most obvious direct items are "Donate Now" buttons (either their own or using an ASP) and email. The less direct way is using the 'net for promotion, communications, and visibility.

Email can be used for a direct appeal, or for newsletters with indirect asks. But, again, limited budget and staff to implement these has kept most smaller and medium sized organizations from fully realizing the potential benefit of these tools.

I mention budget a lot. Email is cheap to use, and scales cheaply, but can be costly to implement effectively (opt-in systems to avoid spamming, software or ASP's beyond the basic MS Outlook, and the staff to actually manage lists and write the messages).

> * Is traditional fundraising still part of the fundraising mix?

Most definitely so. For the reasons listed above (slow implementation, budget, etc.), but also because of human nature.

While online tools are fabulous for meeting new donors, and younger donors, there is nothing that can ever compare to the personal touch of the in-person ask.

Even snail mail has a place, as it's far easier to make an emotional connection with a photo you can hold in your hand than with an email that may or may not properly display images based on the user's software settings and operating system.

In the area of Foundation grants, the worlds are merging somewhat as more and more Foundations accept online applications. It is traditional fundraising in terms of the skills required for completing the applications, but they are adapted to the online world.

For that matter, you could say that all online fundraising is just an adaptation of traditional methods. It's the medium that has changed - or expanded - not the message or the appeal.

> * The future of online fundraising?

More effective integration of cause and effect using tags and feeds. For example, it's entirely feasible for a news website to automatically match stories (IE: flood in India) to donation opportunities (IE: International Red Cross).

They do this now, manually, with major disasters. But with proper use of tagging, RSS, etc., it's entirely possible that even "minor" local stories (IE: car crash kills drunk driver) can automatically linked to local causes (IE: local United Way or MADD or AA chapter).

What I'm saying is really, technology gives us the opportunities to be more pro-active and less passive in our efforts. Rather than waiting for a potential supporter to come to our web site or sign up for our email newsletter, we will be able to find them based on what they're reading and hook directly into their online experience.

> * Why are many nonprofit are still waiting with their online fundraising?

Money, or the perception of no money. While many of these tools are low or even no cost (use of as a communications platform), they are loath to give even the impression that they are wasting resources.

Example: An organization I know of that was given very nice, high quality office chairs from a defunct dot-com. They were not allowed to use them because it gave the impression that they were extravagant. Many nonprofits live in this poverty mind-set.

Any assets must go to the clients. Anything that doesn't directly benefit them is seen as a waste. What they don't see is that a small investment in online tools will create a return that can be used for mission and services.

> * What will make a website a good ePhilanthropy site?

See "the future" question above. It's the integration of information and ask. Don't make the potential donor search for the means to give.

Have the opportunity linked directly into the inspiration. This is the answer.

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