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Disrupting Philanthropy

By Erin Biba

The internet has created a revolution in giving. According to Giving USA, an annual report on philanthropy conducted by Indiana University Lilly Family School of Philanthropy, last year Americans gave more money than they ever have in history: $390.05 billion. And in many cases, it is Bay Area–based digital companies that helped them achieve this unprecedented number. Some of the region’s top charity-enablers talked to us about how technology is changing the game—and introducing philanthropy to a new generation.

Watsi

A less traditional crowdfunding platform, Watsi was the first nonprofit to come out of Y Combinator (a startup accelerator that invests in new projects twice per year). The site raises money through digital giving to pay the medical costs of essential surgeries for patients in 32 countries outside the U.S. A donor can read the story of a patient in need and contribute directly to their medical care. The team at Watsi, headquartered in San Francisco, works with medical partners at hospitals and clinics to identify which patients are most in need. Then, Watsi helps tell those patients’ stories and promote their campaigns online. What makes the site especially unique: If a surgery is not fully funded by donors, a general fund guarantees that anyone selected to appear on Watsi.org will get financial help.

So far they have funded surgeries for about 15,000 people around the world. Many of the cases Watsi funds highlight how lack of access to proper healthcare can snowball into bigger problems down the road. For example, one current crowdfunding case is for a seventh-grader from Cambodia named Piseth. Two years ago he suffered an ear infection, which then created a perforation of his eardrum that causes him regular pain and has yet to be fixed. He needs just $423 to have the essential surgery to repair the damage. As a result of stories like Piseth’s, Watsi has launched a second arm of their service called Watsi Coverage, which will work to solve inefficiencies in general health care that contribute to a snowball effect of problems.

Thanks to Watsi’s dot-com example, says Brigitte Bradford, Watsi’s Head of Marketing, “people have the ability to be more informed.” It’s easier to learn more about people who are in need and organizations that exist to help those people, she says. “There’s room and space for all types of philanthropy and nonprofits to exist, but the internet has given people an opportunity to take immediate action and feel an immediate connection to that action.”

YouCaring

A crowdfunding site started by missionaries in 2011, YouCaring raised more than $900 million and has grown by 40 percent this year with a totally free business model. Unlike the competition, “we make our money by voluntary tips and donations from donors who come to contribute to different fundraisers,” says YouCaring CMO Maly Ly. “Sure, a lot of people don’t donate. But there are enough people who donate that we’ve been able to grow significantly in the past several years.”

YouCaring captured more attention in a crowded market in late summer when the group helped Houston Texans star J.J. Watt raise $37 million in three weeks for victims of Hurricane Harvey. “If you’re going through hardship, or you need help, crowdfunding is a way to rally your community around the world and take immediate action,” Ly remarks. “That’s why it’s been so incredible for disaster relief efforts.”

She notes that in the past, before digital crowdfunding took off, people had a misconception about how much money was actually helpful to give. “When you thought about charitable giving, you thought you have to have a certain amount of money to be able to make significant impact. But what peer-to-peer crowdfunding does is leverage the power of many to make a big impact. The donations that come in may be $20 or $50, but combined, they allow people to face their hardships. That’s what is so powerful. It does empower the individual person to make a difference.”

GoFundMe

With a name that’s become synonymous with donating, the crowdfunding website says their volume of users is growing so quickly that within a decade they will be the world’s largest giving organization. And it’s easy to believe: Since GoFundMe launched in 2010, the company has helped 4 million donors give $4 billion to charities and personal causes. CEO Rob Solomon credits the power of the internet with contributing to an increase in charitable giving across all platforms.

“There’s a really profound change in charity going on right now,” Solomon says. “There is a true disruption. Everyone’s online. Everyone’s used to using credit cards online. And there’s a universal need for people to help each other out.”

The main reason for this digital disruption, he explains, is that sites like GoFundMe allow users to expand their communities beyond family, friends and neighbors. “People want to help each other out—but it hasn’t always been easy,” he says.

There are barriers to giving: You have to know someone is in need, you have to be able to reach them and, most important, you have to be confident that your money will go to the right place. Online donations are “breaking down barriers and removing the friction. What’s happening is you’re seeing everyday people who want to help. Strangers giving to strangers is an interesting new phenomenon,” he observes.

But it’s not just the donor who’s changing. It’s the charities as well. “Most still rely on direct mail and telemarketing to raise their dollars,” Solomon says. “And most of their donor bases are 50, 60, 70 years old.” But “Millennials aren’t giving to charities the way your mom did.” To keep themselves afloat, these groups require a 21st-century upgrade—and they know it. Which is why GoFundMe recently acquired a company called CrowdRise as part of a strategy to provide small, medium and large charities with software tools to grow their online presence, among other services.

“Our entire focus all day, every day is to make giving faster, easier and more efficient,” stresses Solomon. “In doing that, we’re disrupting the way people give and how they organize.”

Facebook

Two years ago, the social networking behemoth launched its “Donate Now” button, which pops up on users’ posts and allows them to encourage friends to contribute cash to favorite charities. Today, Facebook supports more than 750,000 nonprofits through their platform—any 501 (c) (3) can apply—and that number grew in October when the button became available in Europe.

The company had always wanted to get into the fundraising game, according Emily Dalton Smith, Head of Social Good Partnerships at Facebook. And the enthusiastic response, seemingly more and more visible during a tumultuous year in which fires have devastated Northern California and a new administration in Washington has threatened to defund Planned Parenthood, echoes what others in the digital fundraising space have discovered: The internet makes communities bigger and creates the necessary transparency to get people comfortable with giving money online, which enables more giving. With Facebook, says Dalton Smith, “you can see who’s fundraising. Even if you don’t know the person directly, someone shares [a fundraising campaign] with you or invites you to contribute. You can have confidence in the connection.”

The internet is the great democratizer. It puts charities and individuals on an equal playing field, making it easier to became a philanthropist. Dalton Smith: “You don’t have to have a huge organization or have anything but a story about why it matters to you and a willingness to reach out to your friends. Fundraising is growing generally online and giving has really taken off.”

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