April 19, 2010 | Read Time: 2 minutes
The growing popularity of Kiva, DonorsChoose, and other charity sites that allow online donors to earmark their gifts to specific projects makes a lot of people in the nonprofit world nervous. But two fund-raising consultants say that rather than fearing those groups, charities should embrace their approaches for seeking earmarked gifts as an additional tool to raise money online.
“The message of Kiva and DonorsChoose are not that nonprofits should go out and try to be Kiva or try to be DonorsChoose,” Clinton O’Brien, a vice president at Care2, in Redwood City, Calif., told participants at the recent Nonprofit Technology Conference. “What they have done is shine a light on some new opportunities to layer on something additional to what you already do.”
Nonprofit organizations’ biggest concern with the approach Kiva and DonorsChoose take is that it brings in donations that must be used for a specific purpose, rather than undesignated gifts that can finance anything, including overhead expenses.
But that’s an accounting issue, not a fund-raising issue, argues Michael Cervino, vice president of Beaconfire Consulting, in Arlington, Va.
“If you’re already planning as an organization to spend money on A, B, and C programs at a certain level, then there is no reason not to use that program as a poster child for your fund-raising efforts,” he says. “Go ahead and raise that money. You’re going to spend it there.”
Attracting New Supporters
Sites that allow donors to designate where their gifts go can be “a tremendous hook to bring in new donors,” says Mr. Cervino.
He says that if charities are careful to send a combination of project-specific and general appeals, they can encourage donors to make additional program gifts, while still giving their regular undesignated donations.
Opportunity International, a microfinance charity in Oak Brook, Ill., runs OptINnow, a Web site that allows donors to make contributions to help pay for small loans to help entrepreneurs in developing countries start or expand businesses, much the same thing Kiva does.
At first fund raisers at the charity worried that the site would siphon off previously unrestricted donations, especially from big donors, but that has not been the case, says Reuben Theissen, a product manager at Opportunity International.
“What we’ve seen is that it’s an additional level of engagement for our major donors, who understand the need to fund infrastructure,” he says. “But then they have fun seeing the personal stories on OptINnow, and they’ll fund $25 or $50.”
He says the site has also given its donors an easy way to introduce others to the sometimes complicated work of microfinance.
Says Mr. Theissen: “The comment I kept hearing was, ‘Wow, I’ve been looking for a way to tell my friends about this. I just want to get them in the door.’”
For more about charities’ efforts to raise money online, see The Chronicle’s new online fund-raising survey.
