New Competition for 'Traditional' Nonprofits

While reviewing an online donation form recently, I came across this default question: "keep me informed about how my gift is being used."  This seemed like an opportunity to find out exactly how a donation would be used by our organization. e.g. to support research, to sponsor an event, to provide constituent service.  However it turned out that this question was actually intended as an opt-in for email communication.  Needless to say, I advised that we revise the language so the constituent isn't promised something that we aren't prepared to deliver.

Yet in a recent Chronicle of Philanthropy article, Give and Take (subscription required), many new nonprofits were profiled that can tell donors exactly how their funds are used by allowing constituents to contribute directly to a project of their choice.  This trend is referred to as 'direct giving' or 'peer-to-peer philanthropy' and is utilized by organizations such as GlobalGiving, Kiva, DonorsChoose and ModestNeeds.

These nonprofits are maintained through mostly optional fees added to the donation, although GiveMeaning is trying the advertising route. Since none of these organizations are self-supporting yet, it's unsure whether this concept will survive and, if so, which of these charities will remain.  However, the ability to donate directly to a cause is an area where many traditional nonprofits cannot compete, especially when donations for specific causes are discouraged so funds received are not 'restricted' in their use.

Without the Internet, this type of philanthropy would not exist.  Make a donation to one of these organizations and see how your constituent experience compares to what you've received from most traditional nonprofits.  For a profile of these types of sites, visit Peter Dietz's Social Actions