The $1 Fundraising Model
Does one dollar count as a real contribution?
An Agitator reader pointed us to this approach from PayPal and Philanthroper … a “Groupon fpr Good”.
As reported on Mashable:
“Every day, the site showcases a worthy cause and asks users to donate just $1. Users cannot give any less or any more than $1.
While this limitation may seem counterintuitive, it plays on the idea that a lot of people doing a little bit of good can create massive change. The site is as much about fostering a giving attitude as it is about collecting swaths of money. The goal is to make charity a habit rather than a sporadic or uncommon occurrence.”
Our reader observes:
“While I believe there is great potential for large scale crowd-based fundraising, I have to hope that it happens at a reasonable level – $10+. With the $1 model presented here, I worry that donors are being “trained” that supporting a cause at this level is acceptable and will make an impact, in which case this technique will deliver as much as a tin-can on a shopping counter for individual groups.
Or is this is the first step that opens an individual to a lifetime of philanthropy and leads them to latch on to one or two groups and give them greater support?”
How would you answer that question?
Tom
10 responses to “The $1 Fundraising Model”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Gimmick. Not a fundraising proposition. And will fall down unless they get *huge* take-up. Because if my $1 will only make a real impact if loads of other people give $1, then I’ll dismiss the whole idea if I don’t see enough people giving. And I expect I won’t.
I like the look of the original landing page. It will expose people to a number of new charities and that seems a good thing. But my experience has been that the size of gift you ask for determines both the type of donor you acquire and that donor’s perception of what you need from them. This is the direct mail dilemma of lower asks equals higher Response Rate/low revenue as opposed to higher ask equals lower Response Rate/higher revenue.
Charities that regularly ask for $10 build donor bases of low end donors. Moving a donor up the giving scale is much harder when they create the perception that $10 is all it takes for a charity to feed the hungry, or save a rainforest. Interestingly, that same donor is probably giving larger gifts to another charity based on their perception of what is appropriate to that charity.
I think the concern about “training” donors is valid. Is clicking and giving $1 to a number of successive charities really any different than clicking “LIKE” on a huge number of charity FB pages? Are we training a new generation of donors to think they can change the world with a $1 donation and a LIKE button? I think that is a very strong possibility.
I’m really bothered by the current, unfounded buzz about social media fundraising. I think the flashy marketing tail is wagging the philanthropy dog.
We need better partnership between seasoned fundraisers and bright, technology savvy marketers. We need those innovative marketing skills focused on building high quality, sustainable donor support. Anyone who has ever hired a young marketing professional out of the commercial sector knows how much training they need in order to successfully transition to fundraising. Much of the innovation right now is being driven by well meaning marketing and technology professionals with a limited understanding of what sustainable fundraising entails.
In my experience, the value of gift with which a donor starts to support a charity sets the precedent for the general level of their future donations.
In one job I was encouraged by an ad agency to recruit donors with an ask for three £ coins ($5), with the concept that they could then be upgraded. Sadly, most of those who gave a second gift continued as low value donors and few converted to regular support.
Hmmmm… why position the question as an “either/or.” I’m in the “both” camp. Exploring many ways to raise funds is a must in this competitive environment — as long as you are doing your ROI analysis and making the right trade-offs for your organization.
Low dollar donors are not a new phenomenon. I believe there is value in acquiring these “in the moment” donors – be they through social media, mobile or any other new medium.
Many organizations actively pay to acquire colder leads than these. I think we should be considering these low dollar donors, as no more than that – leads, warm at best.
That said, the key to these digital initiatives is list building and data collection. If you can’t get the 1$ donor’s information for future communication, then these methods really are worth no more to our organizations than a dollar in a tin can at the mall. I don’t mean to trivialize the revenue that organizations can collect from tin cans – but I would caution any organization against investing a thousand dollars in a tin can no matter how shiny.
I would also caution against actively pushing your current constituents to support you through these methods. Don’t let someone who has an average gift of $100 give you $5 through mobile; because they now have the satisfaction of feeling like they have done their part and you are out $95.
As fundraisers and marketers we need to focus our energy on compelling, well segmented communication programs that both educate and compel these new constituents to support us with a higher second gift or even better with a $10 monthly donation. Don’t make the mistake of thinking that because someone gave you $1 that they actually care about you. See it as an opportunity to speak with them about your cause and to compel them to care and in turn support you at a sustainable level.
Seems like a great way to build a solid prospect list.
What is the ROI, short term and long term? The cost to enter and reply to each dollar donor is more than a $1 between staff time and reply cost. You would have to be pretty confident that you can turn a significant number of those donors into long term donors at a significant increase in order to justify this. Now, $1 a day for a year might make me change my mind.
My reaction is that I would not consider these as my organization’s donors. One-shot deal.
As a marketing manager working in philanthropy, I find it hard to convince people to give more to have a tangible and durable impact in people’s life.
I have to say that I totally agree with your reader, it’s not ok to think that by giving $1 to a charity we are actually making a difference. Well, of course, we have to take people reality into account and sad enough, some people cannot give more $1. I believe we should not even ask these people to make a gift or at least less often than we do.
This concept is not new at all and have been used by many international development charities that claim that they can make a difference in people’s life with only $1 a day, which is calculated on a $30 monthly gift.
This concept sounds very commercial to me and a little disrespectful to the beneficiaries. $1 is actually what people in extreme poverty are living on!
In addition, I am not sure I like the fact that the Philanthropic presents the causes as «Deals». I didn’t know charities could be on sale?
This might be a Massachusetts thing, but here, when you shop at Stop&Shop they ask you each time if you want to give $1 to the Jimmy Fund (children’s cancer research) when they’re baggin your stuff.
I was thinking that if they get 20% of shoppers to say “Sure” to that $1 (after all when buying $150 in groceries it doesn’t feel like much) they would get around $200k per year (gross) from that partnership — not to mention the name recognitition they build.
This would be a guess on my part, but I think, yeah, that could work at the right volume … for a charity at least.
If everyone put a dollar in that tin on the counter, just consider the amount of loonies you could collect in one day. The tin on the counter can do very well in some areas and produce nothing in others that is why the tin has been replaced by a plastic box that is bolted to the counter.