Niche Crowdfunding
The Wall Street Journal just published this piece on ‘niche crowdfunding’.
Lots of web entrepreneurs are trying to ‘do good and do well’ by establishing microsites that connect donors directly with small projects seeking donor support.
I have no problem with the do good/do well principle. And I like the direct, one-to-one connection sites like these can offer, if properly conceived and managed. And maybe they engage a new breed or generation of donors.
But I do have some concerns about accountability.
The Journal cites crowdsourcing.org, which tracks the ‘crowd-funding industry’ and has identified more than 400 websites around the world raising money for a variety of needs and causes.
Call me a cynic, but I’m imagining there are some rip-offs amongst them.
The Agitator has been asked from time to time to ‘endorse’ sites like these. We haven’t, because there’s no way we can conduct appropriate due diligence.
Personally, I’m still in a ‘buyer beware’ state of mind about these sites.
What do you think … am I too paranoid?
Tom
6 responses to “Niche Crowdfunding”
Behavioral Science Q & A
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Tom: You are so right on this one. There is a huge risk in giving contributions to these microsites. As long as they cannot be supervised or rated by an oversight entity that can really check their accounts, they should not only remain unendorsed, they should be shunned and donors adequately warned.
Like anything, it’s buyer beware. They are set up to be quick and nimble, so proper overight may never come to them. People donating to one of these does need to understand that it is not the same as donating to an established group with policies, etc.
I don’t think you are being paranoid. You can’t endorse something that you are unsure of. Better to work with these sites on things like accountability. Perhaps a requirement for setting up an ask is some sort of “reporting back”.
Yes, you are paranoid. I read your article everyday and I think that in general you favor traditional fundraising methods and are somewhat afraid of the web and new media. New media is different, there is risk, but I believe that it’s the way of the future. However, I don’t blame you for holding back on endorsement – even with traditional methods, endorsement should be done with care.
What a good subject Tom, I’m curious to see what others respond with. Here’s my feeling: with the recent explosion of micro-finance sites like the ones cited below, there becomes a flood of opportunity for do-gooders to provide their “support” to an array of causes across the world. Sounds nice right? What I want to know is this, what kind of retention rates do these online financiers offer to the organizations they are funding? If scores of small donations come in to small organizations through these sites, the small orgs are going to get excited and thus craft fundraising campaigns to continue to garner support and more of it…but is that all for nothing? Additionally, for non-profits who value the holy unrestricted dollar, do we really want to be encouraging restricted funding for small projects? Do we really want to track those dollars in a micro sense and then provide detailed micro reports on them to steward the gift? Seems like this is a recipe for creating a mountain of unnecessary work at a time when internal staff resources are already tight and gift stewardship is already lackluster. Why set the bar even lower?
Tom
Smells like a scam to me. There are ways to use social media to help direct money to favorite causes that don’t cost the organization a fee.
Jeanne Clark
PennFuture
I don’t think you’re being paranoid, but I have a problem with these sites outside of the accountability concerns. I have heard of a few such sites that I know to be legit, and have likely been a real lifesaver to the families for whom they’ve directly raised money. My problem is that the model seems to ignore the fact that there is a need to invest in strategic, creative and effective organizations…that just helping individuals one by one will never change the big picture. When I give to an organization I feel good about investing in a group whose vision I believe in, and who I know is going to do things to reach that vision, which, along the way, will directly benefit individuals. I understand that these groups figure they should take out the middle man and just jump up and help someone, but I think the whole model is missing the point…and missing an opportunity to create something more sustainable that will ultimately benefit more people more deeply. While fundraising is never easy, it’s easier to raise money for a site like that – it’s so straight forward and sometimes you can even read about the exact family you will help. I worry that this model could draw donors away (especially the next generation of younger donors) because it’s so simple and easy to “get”…and sort of hip and now…or maybe that’s just me whining because I am sometimes challenged when trying to distill my community development corporation’s more layered vision and work into a simple and strong mail appeal…!