Combating the Generosity Gap: How Technology Can Find New On-Ramps and Scale Impact

It’s not news that charitable giving is changing. Societal and economic shifts have contributed to a year-over-year decline in the number of donors and the amounts they contribute to the nonprofit sector. The pressure and complexities fundraisers face are real. There is, however, more to the story.

Our sector has a history of effectively navigating change, and now we are at the start of a new chapter where, once again, we are being forced to adapt. Social media is ubiquitous in our lives. The rapid advent of AI is ushering in a new wave of speculation and curiosity, as well as a flood of easy-to-produce content. The seemingly permanent shift to hybrid work for several sectors has increased dependency on online efficiencies. Plus, the number of apps, podcasts, and streaming platforms available is dense enough to consume infinite lifetimes of idle time.

Today we have the ability to engage with anyone, anywhere, instantly. Yet this ability has made it more difficult for nonprofits to connect with people in a way that resonates and cultivates abiding financial support for their work.

But what if we could effectively provide easy on-ramps to giving and then create ways to maintain meaningful connections with these donors? And what if our tech could help us do this at scale?

The Demise of the Scarcity Mindset

There is an understandable underlying assumption in our space that everyday donors have a finite amount to give. I’d like to present an alternate perspective. What we’ve seen in our platform data from billions of dollars in giving is that givers give. Once a person has decided to open their wallet, they are much more likely to give again – to that cause, to another cause, across giving modalities. In fact, the biggest predictor of whether or not someone will give to your cause is if they’ve given before. Classy data shows that once someone has given on our platform, they’re more than twice as likely to give again.

This goes against all of the drivers of the scarcity mindset. I’ve heard for years about the concept of competing for philanthropic wallet share – how do we secure a donor for this organization if they’ve already given to that one? Partnership is risky if we think the donor might only make a single contribution. But what our data from across the GoFundMe and Classy communities of 150 million is that there is no such thing as a strictly capped donor wallet. It doesn’t exist.

Ushering in New On-Ramps to Giving

What all this tells us is that the enemy of our sector is disengagement. Our job is to get the public to activate. Find the first dollar. Show people they have agency and that they are an important part of the philanthropic ecosystem. Our collective goal must be to unlock this first dollar through storytelling, convert it with a streamlined donation process, and retain it with intentional connection.

One place that we think nonprofits can find engaged individuals is on GoFundMe. The vast majority of giving on GoFundMe is directed at individuals, to the tune of a donation every second. When someone gives to a campaign on GoFundMe, more often than not, they are rallying around their friend, family member, or neighbor. Not in the abstract, but in a real way. A donation to a GoFundMe campaign is an expression of care, love, and solidarity. The platform gives a sense of personal connection and tangible impact in a world whose scale is too big to contemplate.

These are the moments that make people givers. This is a very powerful, very broad on-ramp for giving, and our focus has been on learning more about how to make this on-ramp accessible for the nonprofit sector. Once someone has given, how do we parlay this act of generosity into an identity? How do we turn someone helping their neighbor into a philanthropist? How do we facilitate the connections to the social sector so people want to stay engaged in the work?

For the past year, Classy and GoFundMe have been hard at work building something powerful. We’ve been talking to customers, analyzing our first-party data, and testing ideas to create a more connected community, all with the goal of building the intelligence layer that will allow nonprofits to better understand and engage communities of supporters and potential supporters to try to reverse the declining donor participation trends and help bring more individuals into the web of philanthropy… at scale.

A Vision for the Future of Charitable Giving

We worked with 18 Classy customers who represent a broad swath of causes to create a unique profile to feed into our machine-learning engine, matching donors with a relevant nonprofit recommendation immediately after a GoFundMe donation. We’ve already learned some encouraging insights based on just an initial run of the experiment.

First, our machine learning model is a powerful way to scale these recommendations. We can, in fact, introduce donors to nonprofits in a very relevant way. Secondly, individuals who engaged saw this as an easy round-up. The average donation amount to the organization we introduced to the donor was low, around $20. But if the goal is getting donors into the giving ecosystem, this was an important introductory point that set the foundation for a new and meaningful relationship.

Promoting a Culture of Continuous Improvement and Adaptation

The foundation of nonprofit fundraising remains the same—engaging donors in meaningful ways to inspire generosity. As donor behavior and technology evolve, though, nonprofits must change how that’s done. Staying receptive to new ideas and being agile in response to emerging challenges will enable organizations to remain resilient and effective in their missions.

Based on updated reports from the IRS, we know it’s possible. Approximately 7 out of 10 registered 501(c)(3) organizations grew last year despite macroeconomic challenges. Among those that experienced growth, Classy customers outperformed the average by nearly 4.5 times, resulting in an average of over $3 million in additional funding per organization per year.

These exceptional outcomes testify to the power of comprehensive technology and its ability to scale your storytelling, get people to that first dollar, and future-proof your core functions.

And we’re still only scratching the surface. There is generosity around us waiting to be unlocked, and Classy and GoFundMe are excited to be working with thousands of nonprofits and millions of potential donors to find the key.

If you want to learn more about Classy and GoFundMe’s pilot programs, new initiatives, and ongoing research, we encourage you to subscribe to Classy’s emails.